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169-464: Joseph "Joe" A. Numero sold his Cinema Supplies Inc. movie sound equipment business to RCA in 1938 and formed a new entity, the U.S. Thermo Control Company (later the Thermo King LLC), in partnership with his engineer, inventor Frederick McKinley Jones . Jones designed a portable air-cooling unit for trucks carrying perishable food, for which they had obtained a patent on July 12, 1940, subsequent to

338-788: A felony .... Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony .... Federal judges quickly began struggling with the broad wording of the Sherman Act, recognizing that interpreting it literally could make even simple business associations such as partnerships illegal. They began developing principles for distinguishing between "naked" trade restraints between rivals that suppressed competition and other restraints that were merely "ancillary" to cooperation agreements that promoted competition. The Sherman Act gave

507-404: A felony , and, on conviction thereof, shall be punished by fine not exceeding $ 100,000,000 if a corporation , or, if any other person, $ 1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court. Preventing collusion and cartels that act in restraint of trade is an essential task of antitrust law. It reflects the view that each business has

676-547: A $ 490 million company loss. Sperry Rand 's UNIVAC division took over the RCA computer division in January 1972. Univac did not want the Spectra computers because they were similar to its own 9000 series; instead, they wanted RCA's computer customer base. On January 1, 1965, Robert Sarnoff succeeded his father as RCA's president, although the elder Sarnoff remained in control as chairman of

845-412: A 14-day company-sponsored tour of Japan and Southeast Asia, which was organized as a reward for sales performance. A company spokesman, quoted in the press in reaction to the tragedy, said that "this has got to be one of the worst things that a company can experience." Thirty years later, the company would suffer a similar tragedy when Jill Watson, daughter of company president James F. Watson, was killed in

1014-400: A 60%–40% ratio in output between the two companies. Although the patent cross-licensing agreements had been intended to give the participants domination of equipment sales, the tremendous growth of the market led to fierce competition, and in 1925 RCA fell behind Atwater Kent as the leader in receiver sales. RCA was particularly hamstrung by the need to coordinate its sales within the limits of

1183-525: A broad range of legal and economic theory sees the role of antitrust laws as also controlling economic power in the public interest. Surveys of American Economic Association members since the 1970s have shown that professional economists generally agree with the statement: "Antitrust laws should be enforced vigorously." In the United States and Canada , and to a lesser extent in the European Union ,

1352-440: A challenge to invent a refrigerated truck over a golf game by associates of Numero's, Werner Transportation Co.'s President Harry Werner, and United States Air Conditioning Co.'s President Al Fineberg, resulting in the "Model A" and the founding of Thermo King. The invention ushered in the era of frozen foods, large supermarkets, and the modern restaurant industry. Refrigerated transport made the delivery of fresh produce anywhere in

1521-562: A clear precedent, to which the situation is analogous, proof of an anti-competitive effect is more difficult. The reason for this is that the courts have endeavoured to draw a line between practices that restrain trade in a "good" compared to a "bad" way. In the first case, United States v. Trans-Missouri Freight Association , the Supreme Court found that railroad companies had acted unlawfully by setting up an organisation to fix transport prices. The railroads had protested that their intention

1690-599: A commercial version of his prototype system could be produced in a relatively short time for $ 100,000. Following what would actually be many years of additional research and millions of dollars, RCA demonstrated an all-electronic black-and-white television system at the 1939 New York World's Fair . RCA began regular experimental television broadcasting from the NBC studios to the New York metropolitan area on April 30, 1939, via station W2XBS, channel 1 (which evolved into WNBC channel 4) from

1859-528: A company whose holdings included motion picture theaters. The theaters in which RKO had an interest provided a potential market for the RCA Photophone sound systems. RCA ownership of RKO stock expanded from about one quarter in 1930 to about 61% in 1932. RKO encountered severe financial problems, going into receivership from early 1933 until 1940. RCA sold its holdings in the studio to raise funds for its basic operations. After years of industry complaints that

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2028-406: A cross-licensing agreement, effective July 1, 1921, that included a concession that 40% of RCA's equipment purchases would be from Westinghouse. Following these transactions, GE owned 30.1% of RCA's stock, Westinghouse 20.6%, AT&T 10.3%, and United Fruit 4.1%, with the remaining 34.9% owned by individual shareholders. In 1930, RCA agreed to occupy the yet-to-be-constructed landmark skyscraper of

2197-482: A diversified multinational conglomerate. Additionally, RCA began to face increasing domestic competition from international electronics firms such as Sony , Philips , Matsushita and Mitsubishi . RCA suffered enormous financial losses in the mainframe computer industry and other failed projects including the CED videodisc system. Although the company was rebounding by the mid-1980s, RCA never regained its former eminence and

2366-409: A duty to act independently on the market, and so earn its profits solely by providing better priced and quality products than its competitors. The Sherman Act §1 prohibits "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce." This targets two or more distinct enterprises acting together in a way that harms third parties. It does not capture

2535-434: A fully independent company. As a result, GE and Westinghouse gave up their ownership interests in RCA, while RCA was allowed to keep its factories. To give RCA a chance to establish itself, GE and Westinghouse were required to refrain from competing in the radio business for the next two and one-half years. RCA began television development in early 1929, after an overly optimistic Vladimir K. Zworykin convinced Sarnoff that

2704-514: A joint new company, RCA initially had little true interest in the phonograph record business. The management of RCA was interested essentially in Victor's superior sales capabilities through the record company's large network of authorized distributors and dealers, as well as the extensive, efficient manufacturing facilities in Camden, New Jersey . Immediately following the purchase of Victor, RCA began planning

2873-467: A limited market of amateur radio enthusiasts. By 1922, the rise of broadcasting had dramatically increased the demand for radio equipment by the general public, and this development was reflected in the title of RCA's June 1, 1922, catalog, "Radio Enters the Home". RCA began selling receivers under the "Radiola" name, marketing equipment produced by GE and Westinghouse under the production agreement that allocated

3042-467: A major producer of vacuum tubes, which were branded Radiotron in the United States. Especially after the rise of broadcasting, they were a major profit source for the company. RCA's strong patent position meant that the company effectively set the selling prices for vacuum tubes in the U.S., which were significantly higher than in Europe, where Lee de Forest had allowed a key patent issued to him to lapse. RCA

3211-406: A major proponent of the 8-track tape cartridge , which it launched in 1965. Initially, the 8-track made a huge and profitable impact on consumers of recorded music. Sales of the 8-track tape format began to decline during the late 1970s when consumers increasingly favored the 4-track compact cassette tape format developed by Philips . RCA was one of a number of companies in the 1960s that entered

3380-416: A monopoly in any line of commerce. In theory predatory pricing happens when large companies with huge cash reserves and large lines of credit stifle competition by selling their products and services at a loss for a time, to force their smaller competitors out of business. With no competition, they are then free to consolidate control of the industry and charge whatever prices they wish. At this point, there

3549-578: A monopoly. The FTC and the Justice Department both have the authority to file lawsuits seeking to block or invalidate unlawful mergers. The FTC may challenge a merger in its own administrative court instead of filing a lawsuit in a United States district court , although defendants can appeal the FTC's decisions to one of the United States courts of appeals . In addition to the FTC and the Justice Department,

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3718-467: A number of exemptions. Mergers and joint agreements of professional football, hockey, baseball, and basketball leagues are exempt. Major League Baseball was held to be broadly exempt from antitrust law in the Supreme Court case Federal Baseball Club v. National League . The court unanimously held that the baseball league's organization meant that there was no commerce between the states taking place, even though teams traveled across state lines to put on

3887-443: A party must wait 30 days while the FTC or the Justice Department reviews the merger and decides whether to seek to block it. The 30-day period usually ends with the FTC or Justice Department taking one of three actions: declining to challenge the merger, filing a lawsuit to challenge the merger, or issuing a "Second Request" that extends the waiting period and formally asks the party for all its documents and other information relating to

4056-544: A private party may also file a lawsuit under the Clayton Act if an unlawful merger has injured its ability to compete for business. Under the Hart–Scott–Rodino (HSR) Act of 1976 , any party wanting to execute a merger or acquisition must report it in advance to the FTC and the Justice Department, unless the sizes of the transaction and the parties executing it are both below certain thresholds. After filing its HSR report,

4225-598: A proposed merger was illegal even though the resulting company would have controlled only five percent of the relevant market. In a now-famous line from his dissent in the 1966 decision United States v. Von's Grocery Co. , Supreme Court justice Potter Stewart remarked: "The sole consistency that I can find [in U.S. merger law] is that in litigation under [the Clayton Act], the Government always wins." The "structuralist" interpretation of U.S. antitrust law began losing favor in

4394-594: A reorganization of the Marconi Wireless Telegraph Company of America (commonly called "American Marconi"). In 1897, the Wireless Telegraph and Signal Company, Limited, was founded in London to promote the radio (then known as "wireless telegraphy") inventions of Guglielmo Marconi . As part of worldwide expansion, in 1899 American Marconi was organized as a subsidiary company, holding the rights to use

4563-475: A short distance from the match site, and operating under the call letters WJY . For the broadcast White and Sarnoff telephoned commentary from ringside, which was typed up and then read over the air by J. Owen Smith. The demonstration was a technical success, with a claimed audience of 300,000 listeners throughout the northeast. RCA quickly moved to expand its broadcasting activities. In the fall of 1921, it set up its first full-time broadcasting station, WDY , at

4732-535: A similar agreement with China in 1932. RCA claimed this was breach of contract on the grounds that its 1928 agreement had given it exclusive rights. The dispute went to arbitration, and in 1935 a decision, issued in Radio Corporation of America v China , concluded the Mackay concession was valid, because the earlier RCA concession had not granted exclusive rights. The introduction of organized radio broadcasting in

4901-769: A simple receiver using a curtain rod as an antenna, matching, at a small fraction of the cost, the performance of the massive alternator transmitters. In 1926, Harold H. Beverage further reported that a shortwave signal, transmitted on a 15-meter wavelength (approximately 20 MHz), was received in South America more readily during the daytime than the 200-kilowatt alternator transmissions. The Alexanderson alternators, control of which had led to RCA's formation, were now considered obsolete, and international radio communication would be primarily conducted using vacuum tube transmitters operating on shortwave bands. RCA would continue to operate international telecommunications services for

5070-416: A small number of competitors or oligopolists , have led to significant controversy over whether or not antitrust authorities should intervene. Fourth, vertical agreements between a business and a supplier or purchaser "up" or " downstream " raise concerns about the exercise of market power , however they are generally subject to a more relaxed standard under the "rule of reason". Some practices are deemed by

5239-552: A station's normal transmission frequency – Westinghouse's Frank Conrad unexpectedly found that in some cases the harmonics could be heard farther than the primary signal, something previously thought impossible, as high-frequency shortwave signals, which had poor groundwave coverage, were thought to have a very limited transmission range. In 1924, Conrad demonstrated to Sarnoff that a low-powered shortwave station in East Pittsburgh, Pennsylvania could be readily received in London by

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5408-539: A suspension of the pending alternator sales to the Marconi companies. This would leave General Electric without a buyer for its transmitters, so the officers proposed that GE purchase American Marconi, and use the assets to form its own radio communications subsidiary. Young consented to this proposal, which, effective November 20, 1919, transformed American Marconi into the Radio Corporation of America. The decision to form

5577-447: A transmission rate of a billion or more bits of information a second ... Eventually, a global communications network handling voice, data and facsimile will instantly link man to machine—or machine to machine—by land, air, underwater, and space circuits. [The computer] will affect man's ways of thinking, his means of education, his relationship to his physical and social environment, and it will alter his ways of living. ... [Before

5746-420: Is a cartel . It is irrelevant whether or not the businesses succeed in increasing their profits, or whether together they reach the level of having market power as might a monopoly . Such collusion is illegal per se . Bid rigging is a form of price fixing and market allocation that involves an agreement in which one party of a group of bidders will be designated to win the bid. Geographic market allocation

5915-426: Is also little motivation for investing in further technological research, since there are no competitors left to gain an advantage over. High barriers to entry such as large upfront investment, notably named sunk costs , requirements in infrastructure and exclusive agreements with distributors, customers, and wholesalers ensure that it will be difficult for any new competitors to enter the market, and that if any do,

6084-411: Is an agreement between competitors not to compete within each other's geographic territories. If an antitrust claim does not fall within a per se illegal category, the plaintiff must show the conduct causes harm in "restraint of trade" under the Sherman Act §1 according to "the facts peculiar to the business to which the restraint is applied". This essentially means that unless a plaintiff can point to

6253-458: The Attorney General , to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of

6422-655: The Australian Competition & Consumer Commission announced it was seeking explanations from a US company, Apple In relation to potentially anticompetitive behaviour against an Australian bank in possible relation to Apple Pay . It is not known whether the treaty could influence the enquiry or outcome. In many cases large US companies tend to deal with overseas antitrust within the overseas jurisdiction, autonomous of US laws, such as in Microsoft Corp v Commission and more recently, Google v European Union where

6591-614: The Federal Trade Commission (FTC), the Antitrust Division of the U.S. Department of Justice , and private parties who have been harmed by an antitrust violation. Criminal antitrust enforcement is done only by the Justice Department's Antitrust Division. Additionally, U.S. state governments may also enforce their own antitrust laws, which mostly mirror federal antitrust laws, regarding commerce occurring solely within their own state's borders. The scope of antitrust laws, and

6760-403: The Federal Trade Commission , can bring civil lawsuits enforcing the laws. The United States Department of Justice alone may bring criminal antitrust suits under federal antitrust laws. Perhaps the most famous antitrust enforcement actions brought by the federal government were the break-up of AT&T's local telephone service monopoly in the early 1980s and its actions against Microsoft in

6929-519: The GTE Sylvania Court ruled that non-price vertical restrictions in contracts were no longer per se illegal and should be analyzed under the rule of reason. Overall, the Supreme Court's antitrust rulings during this era on collusion cases under section 1 of the Sherman Act reflected tension between the older "absolutist" approach and the newer Chicago endorsing the rule of reason and economic analysis. The Justice Department and FTC lost most of

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7098-662: The National Medal of Technology was awarded to Joseph A. Numero and Frederick M. Jones. President George Bush presented the awards posthumously to their widows at a ceremony in the White House Rose Garden . Jones was the first African American to receive the award (see Frederick McKinley Jones ). In 1997, Ingersoll Rand acquired Thermo King from Westinghouse for $ 2.56 billion in cash, 13 times earnings, and added it to its Climate Control Technologies (later Climate Solutions) businesses, alongside Trane and Hussmann. At

7267-461: The Netscape browser. In 2000, the trial court ordered Microsoft to split in two, preventing it from future misbehavior. Microsoft appealed to the U.S. Court of Appeals for the D.C. Circuit , which affirmed in part and reversed in part. In addition, it removed the judge from the case for discussing the case with the media while it was still pending. With the case in front of a new judge, Microsoft and

7436-601: The Noerr-Pennington doctrine . Also, regulations by states may be immune under the Parker immunity doctrine . Fourth, the government may grant monopolies in certain industries such as utilities and infrastructure where multiple players are seen as unfeasible or impractical. Fifth, insurance is allowed limited antitrust exemptions as provided by the McCarran-Ferguson Act of 1945. Sixth, M&A transactions in

7605-518: The Progressive Era prompted public officials to increase enforcement of antitrust laws. The Justice Department sued 45 companies under the Sherman Act during the presidency of Theodore Roosevelt (1901–09) and 90 companies during the presidency of William Howard Taft (1909–13). In 1911, the U.S. Supreme Court reframed U.S. antitrust law as a " rule of reason " in its landmark decision Standard Oil Co. of New Jersey v. United States . At trial,

7774-869: The Rockefeller Center complex, 30 Rockefeller Plaza , which in 1933 became known as the RCA Building (renamed the GE Building in 1988 and currently known as the Comcast Building after Comcast acquired NBC). This lease was critical for enabling the massive project to proceed as a commercially viable venture—David Rockefeller cited RCA's action as being responsible for "the salvation of the project". RCA's primary business objectives at its founding were to provide equipment and services for seagoing vessels, and "worldwide wireless" communication in competition with existing international undersea telegraph cables. To provide

7943-748: The Sherman Act 1890 §7, these may be trebled, a measure to encourage private litigation to enforce the laws and act as a deterrent. The courts may award penalties under §§1 and 2, which are measured according to the size of the company or the business. In their inherent jurisdiction to prevent violations in future, the courts have additionally exercised the power to break up businesses into competing parts under different owners, although this remedy has rarely been exercised (examples include Standard Oil , Northern Securities Company , American Tobacco Company , AT&T Corporation and, although reversed on appeal, Microsoft ). Three levels of enforcement come from

8112-558: The Spark-gap transmitters that had been traditionally used by the Marconi companies. Marconi officials were so impressed by the capabilities of the Alexanderson alternators that they began making preparations to adopt them as their standard transmitters for international communication. A tentative plan made with General Electric proposed that over a two-year period the Marconi companies would purchase most of GE's alternator production. However,

8281-541: The United States , antitrust law is a collection of mostly federal laws that govern the conduct and organization of businesses in order to promote economic competition and prevent unjustified monopolies . The three main U.S. antitrust statutes are the Sherman Act of 1890 , the Clayton Act of 1914 , and the Federal Trade Commission Act of 1914 . These acts serve three major functions. First, Section 1 of

8450-636: The United States Department of Justice involved nonreportable transactions. Despite considerable effort by the Clinton administration , the Federal government attempted to extend antitrust cooperation with other countries for mutual detection, prosecution and enforcement. A bill was unanimously passed by the US Congress ; however by 2000 only one treaty has been signed with Australia . On 3 July 2017

8619-537: The associationalist view that close collaboration among business leaders and government officials could efficiently guide the economy. Some Americans abandoned faith in free market competition entirely after the Wall Street Crash of 1929 . Advocates of these views championed the passage of the National Industrial Recovery Act of 1933 and the centralized economic planning experiments during

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8788-504: The cathode ray-tube (CRT) picture tube itself. The rapid rise of radio broadcasting during the early 1920s, which provided unlimited free entertainment in the home, had a detrimental effect on the American phonograph record industry. The Victor Talking Machine Company in Camden, New Jersey , was then the world's largest manufacturer of records and phonographs , including its popular showcase "Victrola" line. In January 1929, RCA purchased

8957-587: The FCC adopted a standard for color television that had been promoted by CBS, but the effort soon failed, primarily because the color broadcasts could not be received by existing black-and-white sets. As the result of a major research push, RCA engineers developed a method of "compatible" color transmissions that, through the use of interlacing, simultaneously broadcast color and black-and-white images, which could be picked up by both color and existing black-and-white sets. In 1953, RCA's all-electronic color television technology

9126-425: The FCC stepped in to limit its broadcasts. Following the adoption of National Television System Committee (NTSC) recommended standards, the FCC authorized the start of commercial television broadcasts on July 1, 1941. The entry of the United States into World War II a few months later greatly slowed its deployment, but RCA resumed selling television receivers almost immediately after the war ended in 1945. In 1950,

9295-705: The Federal Trade Commission (FTC) as an independent agency that has shared jurisdiction with the Justice Department over federal civil antitrust enforcement and has the power to prohibit "unfair methods of competition". Despite the passage of the Clayton Act and the FTC Act, U.S. antitrust enforcement was not aggressive between the mid-1910s and the 1930s. Based on their experience with the War Industries Board during World War I , many American economists, government officials, and business leaders adopted

9464-497: The Federal government, primarily through the Department of Justice and the Federal Trade Commission, the governments of states, and private parties. Public enforcement of antitrust laws is seen as important, given the cost, complexity and daunting task for private parties to bring litigation, particularly against large corporations. The federal government, via both the Antitrust Division of the United States Department of Justice and

9633-645: The GE/Westinghouse production quotas, and often had difficulty keeping up with industry trends. However, the company made a key advance in early 1924 when it began selling the first superheterodyne receivers, whose high level of performance increased the brand's reputation and popularity. RCA was the exclusive manufacturer of superheterodyne radio sets until 1930. All RCA receivers were battery powered until late 1927 when plug-in AC sets were introduced, providing another boost in sales. RCA inherited American Marconi's status as

9802-477: The Justice Department had successfully argued that American petroleum conglomerate Standard Oil had violated the Sherman Act by building a monopoly in the oil refining industry through economic threats against competitors and secret rebate deals with railroads. On appeal, the Supreme Court affirmed the trial court's verdict, holding that Standard Oil's high market share was proof of its monopoly power and ordering it to break itself up into 34 separate companies. At

9971-622: The Justice Department's Antitrust Division , which had been established in 1919. This intellectual shift influenced American courts to abandon their acceptance of sector-wide cooperation among companies. Instead, American antitrust jurisprudence began following strict "structuralist" rules that focused on markets' structures and their levels of concentration . Judges usually gave little credence to defendant companies' attempts to justify their conduct using economic efficiencies , even when they were supported by economic data and analysis. In its 1940 decision United States v. Socony-Vacuum Oil Co. ,

10140-457: The Marconi patents in the United States and Cuba. In 1912 it took over the assets of the bankrupt United Wireless Telegraph Company , and from that point forward it became the dominant radio communications company in the United States. When the United States entered World War I in April 1917, the federal government took control of most civilian radio stations to use them for the war effort. Although

10309-524: The NBC name and remained under RCA ownership until 1986. For two decades the NBC radio network's roster of stars provided ratings consistently surpassing those of its main competitor, the Columbia Broadcasting System (CBS). But in 1948, as the transition from radio to television was beginning, NBC's leadership came under attack due to what became known as the "Paley raids", named after the president of CBS, William S. Paley . After World War II

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10478-556: The NFL as a "cartel" of 32 independent businesses subject to antitrust law, not a single entity. Third, antitrust laws are modified where they are perceived to encroach upon the media and free speech, or are not strong enough. Newspapers under joint operating agreements are allowed limited antitrust immunity under the Newspaper Preservation Act of 1970 . More generally, and partly because of concerns about media cross-ownership in

10647-498: The Navy return the stations it had taken control of to the original owners. Due to national security considerations, the Navy was particularly concerned about returning high-powered international stations to American Marconi, since the majority of its stock was in foreign hands, and the British already largely controlled the international undersea telegraph cables. This concern was increased by

10816-637: The Roselle Park, New Jersey company plant. By 1923, RCA was operating three stations—WJZ (now WABC ) and WJY in New York City, and WRC (now WTEM ) in Washington, D.C. A restriction imposed by AT&T's interpretation of the patent cross-licensing agreements required that the RCA stations remain commercial free, and they were financed by profits from radio equipment sales. Beginning in 1922, AT&T became heavily involved in radio broadcasting, and soon became

10985-452: The Sherman Act outlawed "monopoliz[ation]" and "every contract, combination ... or conspiracy in restraint of trade". Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of

11154-511: The Sherman Act prohibits price fixing and the operation of cartels , and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that may substantially lessen competition or tend to create a monopoly. Third, Section 2 of the Sherman Act prohibits monopolization. Federal antitrust laws provide for both civil and criminal enforcement. Civil antitrust enforcement occurs through lawsuits filed by

11323-474: The Sherman Act. American courts were even stricter when hearing merger challenges under the Clayton Act during this era, due in part to Congress's passage of the Celler-Kefauver Act of 1950 , which banned consolidation of companies' stock or assets even in situations that did not produce market dominance. For example, in its 1962 decision Brown Shoe Co. v. United States , the Supreme Court ruled that

11492-930: The Sherman and Clayton Acts. Much of their economic analysis involved game theory , which showed that some conduct that had been thought uniformly anticompetitive, such as preemptive capacity expansion, could be either pro- or anticompetitive depending on the circumstances. The writings of Yale Law School professor Robert Bork and University of Chicago Law School professors Richard Posner and Frank Easterbrook , who all later became prominent federal appellate judges, translated Chicago economists' analytical advances into legal principles that judges could readily apply. Pointing out that economic analysis showed that some previously condemned practices were actually procompetitive and had economic benefits that outweighed their dangers, they argued that many antitrust bright-line per se rules of illegality were unwarranted and should be replaced by

11661-782: The Supreme Court refused to apply the rule of reason to an agreement between oil refiners to buy up surplus gasoline from independent refining companies. It ruled that price-fixing agreements between competing companies were illegal per se under section 1 of the Sherman Act and would be treated as crimes even if the companies claimed to be merely recreating past government planning schemes. The Court began applying per se illegality to other business practices such as tying , group boycotts , market allocation agreements, exclusive territory agreements for sales, and vertical restraints limiting retailers to geographic areas. Courts also became more willing to find that dominant companies' business practices constituted illegal monopolization under section 2 of

11830-502: The Supreme Court's 1974 decision United States v. General Dynamics Corp. , the federal government lost a merger challenge at the Supreme Court for the first time in over 25 years. In 1999 a coalition of 19 states and the federal Justice Department sued Microsoft . A highly publicized trial in the U.S. District Court for the District of Columbia found that Microsoft had strong-armed many companies in an attempt to prevent competition from

11999-532: The Supreme Court's decision in Standard Oil represented an effort by conservative federal judges to "soften" the Sherman Act and narrow its scope. Congress reacted in 1914 by passing two new laws: the Clayton Act, which outlawed using mergers and acquisitions to achieve monopolies and created an antitrust law exemption for collective bargaining ; and the Federal Trade Commission Act, which created

12168-409: The U.S. Department of Justice the authority to enforce it, but the U.S. presidents and U.S. Attorneys General in power during the 1890s and early 1900s showed relatively little interest in doing so. With little interest in enforcing the Sherman Act and courts interpreting it relatively narrowly, a wave of large industrial mergers swept the United States in the late 1890s and early 1900s. The rise of

12337-531: The U.S. Navy objected to the plan, fearing British domination in international radio communications and the national security concerns this raised. The Navy, claiming support from U.S. President Woodrow Wilson , looked for an alternative that would result in an "all-American" company taking over the American Marconi assets. In April 1919, two naval officers, Admiral H. G. Bullard and Commander S. C. Hooper , met with GE president, Owen D. Young and requested

12506-485: The U.S. entered the war in December 1941. During World War II, RCA was involved in radar and radio development in support of the war effort, and ranked 43rd among United States corporations in the value of wartime military production contracts. One such contract was to outfit the battleship USS Texas with a 400-megahertz pulse radar set, using technology developed by RCA acoustics scientist, Irving Wolff . During and after

12675-699: The United States , regulation of media is subject to specific statutes, chiefly the Communications Act of 1934 and the Telecommunications Act of 1996 , under the guidance of the Federal Communications Commission . The historical policy has been to use the state's licensing powers over the airwaves to promote plurality. Antitrust laws do not prevent companies from using the legal system or political process to attempt to reduce competition. Most of these activities are considered legal under

12844-646: The United States entered World War II, the cornerstone was laid for a research and development facility in Princeton, New Jersey called RCA Laboratories. Led for many years by Elmer Engstrom , it was used to develop many innovations, including color television , the electron microscope , CMOS -based technology, heterojunction physics, optoelectronic emitting devices , liquid crystal displays (LCDs), videocassette recorders , direct broadcast television, direct broadcast satellite systems and high-definition television . RCA plants switched to war production shortly after

13013-476: The United States; JVC retained the 'Victor' and "His Master's Voice" trademarks for use in Japan only. In 1955, RCA sold its Estate brand of large appliance operations to Whirlpool Corporation . As part of this transaction, Whirlpool was given the right to market "RCA Whirlpool" appliances through the mid-1960s. RCA manufactured equipment for repairing radios, such as oscilloscopes. RCA Graphic Systems Division (GSD)

13182-723: The Victor Talking Machine Company; this acquisition became known as the RCA Victor Division of the Radio Corporation of America, and included ownership of Victor's Japanese subsidiary, the Victor Company of Japan (JVC), formed in 1927 and controlling interest in The Gramophone Company Ltd. (later EMI Records ) in England. RCA's acquisition of the Victor company included the western hemisphere rights to

13351-595: The acting president of the National Amateur Wireless Association (NAWA), an organization originally formed by American Marconi which had been inherited by RCA. White agreed to recruit the NAWA membership for volunteers to provide assistance at the listening sites, and also enlisted David Sarnoff for financial and technical support. RCA was authorized to set up a temporary longwave radio station, located in Hoboken

13520-690: The announcement in late 1918 of the formation of the Pan-American Wireless Telegraph and Telephone Company, a joint venture between American Marconi and the Federal Telegraph Company , with plans to set up service between the United States and South America. The Navy had installed a high-powered Alexanderson alternator , built by General Electric (GE), at the American Marconi transmitter site in New Brunswick, New Jersey. It proved to be superior for transatlantic transmissions to

13689-437: The area of vacuum tube technology and GE needed access to additional patents before its new subsidiary could be fully competitive. During this time American Marconi had been steadily falling behind others in the industry. The two companies entered into negotiations which resulted in a series of mutually beneficial cross-licensing agreements between themselves and various other companies in the industry. On July 1, 1920, an agreement

13858-536: The attic or basement. RCA Victor began selling the first all-electric Victrola in 1930 and in 1931 the company attempted to revitalize record sales with the introduction of 33 1 ⁄ 3 revolutions-per-minute (rpm) long play records, which were a commercial failure during the Great Depression, partly because the Victrolas with two speed turntables required to play them were exorbitantly expensive, and also because

14027-399: The audio performance of the new records was generally poor; the new format used the same groove size as existing 78 rpm records, and it would require the smaller-radius stylus of the later microgroove systems to achieve acceptable slower-speed performance. Additionally, the new long-play records were pressed in a pliable, vinyl-based material called "Victrolac" which wore out rapidly under

14196-471: The board. The younger Sarnoff sought to modernize RCA's image with the introduction in late 1968 of what was then a futuristic-looking new logo (the letters 'RCA' in block, modernized form), replacing the original lightning bolt logo, and the virtual retirement of both the Victor and Nipper/"His Master's Voice" trademarks. The RCA Victor Division was renamed RCA Records; the 'Victor' and 'Victrola' trademarks were no longer used on RCA consumer electronics. 'Victor'

14365-443: The case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises. The remedies for violations of U.S. antitrust laws are as broad as any equitable remedy that a court has the power to make, as well as being able to impose penalties. When private parties have suffered an actionable loss, they may claim compensation. Under

14534-450: The close of business at 2:00   pm each day at any price other than that day's closing price did not violate the Sherman Act. The Court said that although the rule was a restraint on trade, a comprehensive examination of the rule's purposes and effects showed that it "merely regulates, and perhaps thereby promotes competition." During the mid-1930s, confidence in the statist centralized economic planning models that had been popular in

14703-411: The company made a wide-ranging series of acquisitions, including Hertz (rental cars), Banquet (frozen foods and TV dinners ), Coronet (carpeting), Random House (publishing) and Gibson (greeting cards). However, the company was slipping into financial disarray, with wags calling it "Rugs Chickens & Automobiles" (RCA), to poke fun at its new direction. United States antitrust law In

14872-401: The company's founding, served as president from 1930 to 1965, and remained active as chairman of the board until the end of 1969. During the 1970s, RCA's seemingly impregnable stature as a leader in technology, innovation and home entertainment began to weaken as the company attempted to expand beyond its main focus of the development and marketing of consumer electronics and communications into

15041-407: The condition , agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create

15210-663: The costs of providing programming threatened to exceed the funds available from equipment profits. The problem was resolved in 1926 when AT&T unexpectedly decided to exit the radio broadcasting field. RCA purchased, for $ 1,000,000, AT&Ts two radio stations, WEAF and WCAP in Washington, D.C., as well as its network operations. These assets formed the basis for the creation of the National Broadcasting Company (NBC), with ownership divided between RCA (50%), General Electric (30%), and Westinghouse (20%) until 1930, when RCA assumed 100% ownership. This purchase also included

15379-433: The country a possibility, regardless of the season. The concept of continuous cooling of perishables is often referred to as the "Farm to Fork" cold chain . With mobile refrigeration compressors driven by fuel-powered engines and stationary refrigeration compressors driven by grid-sourced electricity, the food is kept cold from the point of production through to the point of distribution to consumers. In 1942, Jones developed

15548-461: The course of such commerce, to lease or make a sale or contract for sale of goods , wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on

15717-513: The court must ordinarily consider the facts peculiar to the business to which the restraint is applied, its condition before and after the restraint was imposed, the nature of the restraint, and its effect, actual or probable. Section 7 of the Clayton Act makes it illegal to execute a merger or acquisition if the effect "may be substantially to lessen competition, or to tend to create a monopoly." No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly,

15886-401: The courts to be so obviously detrimental that they are categorized as being automatically unlawful, or illegal per se . The simplest and central case of this is price fixing . This involves an agreement by businesses to set the price or consideration of a good or service which they buy or sell from others at a specific level. If the agreement is durable, the general term for these businesses

16055-576: The crash of TWA Flight 800 . During the 1970s, Thermo King continued to manufacture equipment for the transportation industry. Their early efforts have evolved into a widely recognized line of products and Thermo King has become a worldwide business. Thermo King Europe opened in Galway, Ireland, and began producing refrigeration units to be sold throughout Europe, Africa, the Middle East, Australia and Asia. Their global expansion continues to this day. In 1991,

16224-452: The cross-licensing agreements between RCA, GE, and Westinghouse had in effect created illegal monopolies, the U.S. Department of Justice brought antitrust charges against the three companies in May 1930. After much negotiation, in 1932 the Justice Department accepted a consent agreement that removed the restrictions established by the cross-licensing agreements, and also provided that RCA would become

16393-411: The decisions of a single enterprise, or a single economic entity, even though the form of an entity may be two or more separate legal persons or companies. In Copperweld Corp. v. Independence Tube Corp. it was held an agreement between a parent company and a wholly owned subsidiary could not be subject to antitrust law, because the decision took place within a single economic entity. This reflects

16562-458: The defense sector are often subject to greater antitrust scrutiny from the Department of Justice and the Federal Trade Commission . The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of sections 1 to 7 of this title; and it shall be the duty of the several United States attorneys, in their respective districts, under the direction of

16731-454: The degree to which they should interfere in an enterprise's freedom to conduct business, or to protect smaller businesses, communities and consumers, are strongly debated. Some economists argue that antitrust laws actually impede competition, and may discourage businesses from pursuing activities that would be beneficial to society. One view suggests that antitrust laws should focus solely on the benefits to consumers and overall efficiency, while

16900-414: The discretion of the court. The law's treatment of monopolies is potentially the strongest in the field of antitrust law. Judicial remedies can force large organizations to be broken up, subject them to positive obligations , impose massive penalties, and/or sentence implicated employees to jail. Under Section 2 of the Sherman Act, every "person who shall monopolize, or attempt to monopolize ... any part of

17069-450: The early 1920s resulted in a dramatic reorientation and expansion of RCA's business activities. The development of vacuum tube radio transmitters made audio transmissions practical, in contrast with the earlier transmitters which were limited to sending the dits-and-dahs of Morse code . Since at least 1916, when he was still at American Marconi, David Sarnoff had proposed establishing broadcasting stations, but his memos to management promoting

17238-533: The early 1970s in the face of harsh criticism by economists and legal scholars from the University of Chicago . Scholars from the Chicago school of economics had long called for reducing price regulation and limiting barriers to entry . Newer Chicago economists like Aaron Director argued that there were economic efficiency explanations for some practices that had been condemned under the structuralist interpretation of

17407-495: The early 20th century as U.S. states passed laws that made it easier to create new corporations . In most other countries, antitrust law is now called " competition law " or "anti-monopoly law". American antitrust law formally began in 1890 with the U.S. Congress 's passage of the Sherman Antitrust Act , although a few U.S. states had passed local antitrust laws during the preceding year. Using broad and general terms,

17576-555: The early stages of the New Deal . The Supreme Court's decisions in antitrust cases during this period reflected these views, and the Court had a "largely tolerant" attitude toward collusion and cooperation between competitors. One prominent example was the 1918 decision Chicago Board of Trade v. United States , in which the Court ruled that a Chicago Board of Trade rule banning commodity brokers from buying or selling grain forwards after

17745-610: The early years of the New Deal era began to wane. At the urging of economists such as Frank Knight and Henry C. Simons , President Franklin D. Roosevelt 's economic advisors began persuading him that free market competition was the key to recovery from the Great Depression . Simons, in particular, argued for robust antitrust enforcement to “de-concentrate” American industries and promote competition. In response, Roosevelt appointed "trustbusting" lawyers like Thurman Arnold to serve in

17914-418: The end of that same year, David Sarnoff, after being incapacitated by a long-term illness, was removed as the company's chairman of the board. He died in December 1971. RCA's exit from the mainframe computer market in 1971 marked a milestone in its transition from electronics and technology toward Robert Sarnoff's goal to diversify RCA as a multinational business conglomerate . During the late 1960s and 1970s,

18083-680: The end of this century, these forces] will coalesce into what unquestionably will become the greatest adventure of the human mind." RCA marketed a Spectra 70 computer line that was hardware, but not software, compatible with IBM's System/360 series. It also produced the RCA Series, which competed against the IBM System/370 . This technology was leased to the English Electric company, which used it for their System 4 series, which were essentially RCA Spectra 70 clones. RCA's TSOS operating system

18252-408: The federal government and felt it deserved to maintain its predominant role in U.S. radio communications. At the company's recommendation, President Wilson appointed Rear Admiral Bullard "to attend the stockholders' and director's meetings... in order that he may present and discuss informally the Government's views and interests". The radio industry had been making technical advances, particularly in

18421-488: The first superheterodyne sets. The company also created the first nationwide American radio network, the National Broadcasting Company (NBC). RCA was also a pioneer in the introduction and development of television, both black and white and especially color television . Throughout most of the company's existence, RCA was closely identified with the leadership of David Sarnoff . He became general manager at

18590-403: The first of five RCA plants to produce Madame X vacuum tubes, which included a proximity fuse used to electronically detonate its payload when it was in range of its target, as opposed to relying on a direct hit. James V. Forrestal, former secretary of the Navy said, "The proximity fuse had helped blaze the trail to Japan. Without the protection this ingenious device has given the surface ships of

18759-583: The first portable refrigeration units for troops stationed overseas in World War II . Thermo King also introduced the first gasoline-powered mechanical refrigerated boxcars in the 1940s, which reduced shipping costs, making fresh produce more widely available and affordable for the public. By 1949, annual revenues reached $ 3 million for the company. With the introduction of diesel engines in refrigerated units in 1958, engine life would out-perform their gasoline-powered counterparts in terms of longevity. Thermo King

18928-425: The fleet, our westward push could not have been so swift and the cost in men and ships would have been immeasurably greater." Greatly miniaturized Nuvistor tubes were a last major vacuum tube innovation, along with General Electric's Compactron , and were meant to compete with the newly introduced transistor. By 1975, RCA had completely switched from tubes to solid-state devices in their television sets, except for

19097-528: The games. That travel was merely incidental to a business which took place in each state. It was subsequently held in 1952 in Toolson v. New York Yankees , and then again in 1972 Flood v. Kuhn , that the baseball league's exemption was an "aberration". However Congress had accepted it, and favored it, so retroactively overruling the exemption was no longer a matter for the courts, but the legislature. In United States v. International Boxing Club of New York , it

19266-426: The government planned to restore civilian ownership of the radio stations once the war ended, many United States Navy officials hoped to retain a monopoly on radio communication even after the war. Contrary to instructions it had received, the Navy began purchasing large numbers of radio stations. When the war ended, Congress rejected the Navy's efforts to have peacetime control of the radio industry and instructed that

19435-491: The government settled, with the government dropping the case in return for Microsoft agreeing to cease many of the practices the government challenged. Every contract , combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of

19604-546: The heavy tonearms then in use. In 1934, following the debacle of its long-play record, RCA Victor introduced the Duo Jr., an inexpensive, small, basic electric turntable designed to be plugged into radio sets. The Duo Jr. was sold at cost, but was practically given away with the purchase of a certain number of Victor records. The Duo Jr.'s rock-bottom price helped to overcome the national apathy to phonographs, and record sales gradually began to recover. Around 1935, RCA began marketing

19773-405: The iconic Nipper /" His Master's Voice " trademark. RCA Victor popularized combined radio receiver-phonographs, and also created RCA Photophone , a movie sound-on-film system that competed with William Fox 's sound-on-film Movietone and Warner Bros. ' sound-on-disc Vitaphone . Although early announcements of the RCA and Victor merger stressed that the two firms were linking equally to form

19942-735: The idea for sales of a "Radio Music Box" had not been followed up at the time. Around 1920, a small number of broadcasting stations began operating, and soon interest in the innovation was spreading nationwide. In the summer of 1921, a Madison Square Garden employee, Julius Hopp, devised a plan to raise charitable funds by broadcasting, from ringside, the July 2, 1921 Dempsey-Carpentier heavyweight championship fight to be held in Jersey City, New Jersey. Hopp recruited theaters and halls as listening locations that would charge admission fees to be used as charitable donations. He also contacted RCA's J. Andrew White,

20111-424: The industry to sector specific regulation (frequently done, for example, in the cases water , education , energy or health care ). The law on public services and administration goes significantly beyond the realm of antitrust law's treatment of monopolies. When enterprises are not under public ownership, and where regulation does not foreclose the application of antitrust law, two requirements must be shown for

20280-548: The industry, in 1941 the Federal Communications Commission (FCC) promulgated a rule designed to force NBC to divest one of them. This order was upheld by the U.S. Supreme Court, and on October 12, 1943, the NBC-Blue network was sold to candy magnate Edward J. Noble for $ 8,000,000, and renamed "The Blue Network, Inc." In 1946 the name was changed to the American Broadcasting Company (ABC). The "Red" network retained

20449-419: The international service, the company soon undertook a massive project to build a "Radio Central" communications hub at Rocky Point, Long Island , New York, designed to achieve "the realization of the vision of communication engineers to transmit messages to all points of the world from a single centrally located source". Construction began in July 1920, and the site was dedicated on November 5, 1921, after two of

20618-525: The late 1990s . Additionally, the federal government also reviews potential mergers to attempt to prevent market concentration . As outlined by the Hart-Scott-Rodino Antitrust Improvements Act , larger companies attempting to merge must first notify the Federal Trade Commission and the Department of Justice's Antitrust Division prior to consummating a merger. These agencies then review the proposed merger first by defining what

20787-475: The law does not seek to prohibit every kind of agreement that hinders freedom of contract , it developed a " rule of reason " where a practice might restrict trade in a way that is seen as positive or beneficial for consumers or society. Third, significant problems of proof and identification of wrongdoing arise where businesses make no overt contact, or simply share information, but appear to act in concert. Tacit collusion , particularly in concentrated markets with

20956-420: The law draws a "basic distinction between concerted and independent action". Multi-firm conduct tends to be seen as more likely than single-firm conduct to have an unambiguously negative effect and "is judged more sternly". Generally the law identifies four main categories of agreement. First, some agreements such as price fixing or sharing markets are automatically unlawful, or illegal per se . Second, because

21125-408: The mainframe computer field to challenge the market leader International Business Machines (IBM). Although at this time computers were almost universally used for routine data processing and scientific research, in 1964 Sarnoff, who prided himself as a visionary, predicted that "The computer will become the hub of a vast network of remote data stations and information banks feeding into the machine at

21294-523: The manufacture of radio sets and components on Victor's Camden assembly lines, while decreasing the production of Victrolas and records. The entire phonograph record industry in America nearly foundered after the stock market crash of 1929 and subsequent Great Depression . During the nadir of the record business in the early 1930s, the manufacture of phonographs and records all but ceased; extant older phonographs were now obsolete and many had been relegated to

21463-548: The market is and then determining the market concentration using the Herfindahl-Hirschman Index (HHI) and each company's market share . The government looks to avoid allowing a company to develop market power , which if left unchecked could lead to monopoly power. The United States Department of Justice and Federal Trade Commission target nonreportable mergers for enforcement as well. Notably, between 2009 and 2013, 20% of all merger investigations conducted by

21632-538: The market's closing time (and then finalise the deals when it opened the next day). The reason for the Board of Trade having this rule was to ensure that all traders had an equal chance to trade at a transparent market price. It plainly restricted trading, but the Chicago Board of Trade argued this was beneficial. Justice Brandeis, giving judgment for a unanimous Supreme Court, held the rule to be pro-competitive, and comply with

21801-481: The merger. Every person who shall monopolize , or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony , and, on conviction thereof, shall be punished by fine not exceeding $ 100,000,000 if a corporation, or, if any other person, $ 1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in

21970-409: The modern law governing monopolies and economic competition is known by its original name — "antitrust law". The term "antitrust" came from late 19th-century American industrialists ' practice of using trusts —legal arrangements where one is given ownership of property to hold solely for another's benefit—to consolidate separate companies into large conglomerates. These " corporate trusts " died out in

22139-538: The modernistic RCA Victor M Special, a polished aluminum portable record player designed by John Vassos that has become an icon of 1930s American industrial design. In 1949, RCA Victor released the first 45 rpm "single" records, as a response to Columbia Records successful introduction of its microgroove 33 1 ⁄ 3  rpm " LP " format in 1948. As RCA Victor adopted Columbia's 33 1 ⁄ 3  rpm LP records in 1950, Columbia then adopted RCA Victor's 45 rpm records. RCA also made investments in

22308-413: The monopolization cases they brought under section 2 of the Sherman Act during this era. One of the government's few anti-monopoly victories was United States v. AT&T , which led to the breakup of Bell Telephone and its monopoly on U.S. telephone service in 1982. The general "trimming back" of antitrust law in the face of economic analysis also resulted in more permissive standards for mergers. In

22477-564: The movie industry, but they performed poorly. In April 1928, RCA Photophone, Inc., was organized by a group of companies including RCA to develop sound-movie technology. In the fall of 1927, RCA had purchased stock in Film Booking Office (FBO), and on October 25, 1928, with the help of Joseph P. Kennedy , the Radio-Keith-Orpheum Corporation (RKO) studio was formed by merging FBO with Keith-Albee-Orpheum Corporation (KAO),

22646-515: The new Empire State Building transmitter on top of the structure. Around this time, RCA began selling its first television set models, including the TRK-5 and TRK-9, in various New York stores. However, the FCC had not approved the start of commercial television operations, because technical standards had not yet been finalized. Concerned that RCA's broadcasts were an attempt to flood the market with sets that would force it to adopt RCA's current technology,

22815-399: The new company was promoted as a patriotic gesture. The corporate officers were required to be citizens of the United States, with a majority of the company stock to be held by U.S. citizens. Upon its founding, RCA was the largest radio communications firm in the United States. Most of the former American Marconi staff continued to work for RCA. Owen Young became the chairman of the board of

22984-400: The new company. Former American Marconi vice president and general manager E. J. Nally become RCA's first president. Nally was succeeded by Major General James G. Harbord , who served from 1922 until January 3, 1930, when Harbord replaced Owen Young as chairman of the board. David Sarnoff, who was RCA's founding general manager, became its third president on the same day. RCA worked closely with

23153-464: The new industry's most important participant. From the beginning, AT&T's policy was to finance stations by commercial sponsorship of the programs. The company also created the first radio network, centered on its New York City station WEAF (now WFAN ), using its long-distance telephone lines to interconnect stations. This allowed them to economize by having multiple stations carry the same program. RCA and its partners soon faced an economic crisis, as

23322-543: The offense of monopolization. First, the alleged monopolist must possess sufficient power in an accurately defined market for its products or services. Second, the monopolist must have used its power in a prohibited way. The categories of prohibited conduct are not closed, and are contested in theory. Historically they have been held to include exclusive dealing , price discrimination , refusing to supply an essential facility , product tying and predatory pricing . It shall be unlawful for any person engaged in commerce, in

23491-413: The partners were required to divest their ownership as part of the settlement of a government antitrust suit. An innovative and progressive company, RCA was the dominant electronics and communications firm in the United States for over five decades. In the early 1920s, RCA was at the forefront of the mushrooming radio industry as a major manufacturer of radio receivers , and the exclusive manufacturer of

23660-423: The performers, while Sarnoff professed his indifference to the defections, stating at an annual meeting that "Leadership built over the years on a foundation of solid service cannot be snatched overnight by buying a few high-priced comedians. Leadership is not a laughing matter." RCA acted as the sales agent for a small line of Westinghouse and GE branded receivers and parts used by home constructors, originally for

23829-497: The proposed twelve antenna spokes had been completed, and two of the 200-kilowatt alternators installed. The debut transmissions received replies from stations in 17 countries. Although the initial installation would remain in operation, the additional antenna spokes and alternator installations would not be completed, due to a major discovery about radio signal propagation. While investigating transmitter "harmonics" – unwanted additional radio signals produced at higher frequencies than

23998-512: The remainder of its existence, through its subsidiary RCA Communications, Inc., and later the RCA Global Communications Company. In 1975, the company formed RCA American Communications , which operated its Satcom series of geostationary communications satellites . International shortwave links were in turn largely supplanted by communications satellites, especially for distributing network radio and television programming. At

24167-592: The right to begin commercial operations. NBC formed two radio networks that eventually expanded nationwide: the NBC-Red Network , with flagship station WEAF, and NBC-Blue , centered on WJZ. Although NBC was originally promoted as expecting to just break even economically, it soon became extremely profitable, which would be an important factor in helping RCA survive the economic pressures of the Great Depression that began in late 1929. Concerned that NBC's control of two national radio networks gave it too much power over

24336-458: The rule of reason. Judges increasingly accepted their ideas from the mid-1970s on, motivated in part by the United States' declining economic dominance amidst the 1973–1975 recession and rising competition from East Asian and European countries. The "pivotal event" in this shift was the Supreme Court's 1977 decision Continental Television, Inc. v. GTE Sylvania, Inc . In a decision that prominently cited Chicago school of economics scholarship,

24505-417: The rule of reason. It did not violate the Sherman Act §1. As he put it, Every agreement concerning trade, every regulation of trade, restrains. To bind, to restrain, is of their very essence. The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question,

24674-471: The same time, however, the Court also held that although the Sherman Act prohibited "every" restraint of trade, it actually banned only those that were "unreasonable". It ruled that the Sherman Act was to be interpreted as a "rule of reason" under which the legality of most business practices would be evaluated on a case-by-case basis according to their effect on competition, with only the most egregious practices being illegal per se . Many observers thought

24843-434: The tax rate for annual incomes above $ 70,000 was 77%, while capital gains were taxed at 25%. Paley worked out an accounting technique whereby individual performers could set up corporations that allowed their earnings to be taxed at the significantly lower rate. Instead of NBC responding with a similar package, Sarnoff decided that this accounting method was legally and ethically wrong. NBC's performers did not agree, and most of

25012-479: The theory of predatory pricing ). Antitrust laws do not apply to, or are modified in, several specific categories of enterprise (including sports, media, utilities, health care , insurance , banks , and financial markets ) and for several kinds of actor (such as employees or consumers taking collective action ). First, since the Clayton Act 1914 §6, there is no application of antitrust laws to agreements between employees to form or act in labor unions . This

25181-505: The time RCA was founded in 1919, all radio and telegraphic communication between China and the US, including official messages, were sent through either German radio or British cable links. The U.S. Navy lobbied RCA to seek a concession for a radio link to China, however the company was reluctant because its other concessions were already operating at a loss. This link began operation in 1928. The Mackay Radio and Telegraph Company of California signed

25350-483: The time Thermo King controlled close to half the global market for refrigeration equipment. RCA The RCA Corporation was a major American electronics company, which was founded in 1919 as the Radio Corporation of America . It was initially a patent trust owned by General Electric (GE), Westinghouse , AT&T Corporation and United Fruit Company . In 1932, RCA became an independent company after

25519-428: The top stars, including Amos and Andy , Jack Benny , Red Skelton , Edgar Bergen , Burns and Allen , Ed Wynn , Fred Waring , Al Jolson , Groucho Marx and Frank Sinatra moved from NBC to CBS. As a result, CBS boasted of having sixteen of the twenty top-rated programs in 1949. The consequences would carry over to television, where CBS maintained its newfound dominance for decades. Paley had personally worked to woo

25688-426: The trade or commerce among the several States" commits an offence. The courts have interpreted this to mean that monopoly is not unlawful per se , but only if acquired through prohibited conduct. Historically, where the ability of judicial remedies to combat market power have ended, the legislature of states or the Federal government have still intervened by taking public ownership of an enterprise, or subjecting

25857-399: The trust will have ample advance warning and time in which to either buy the competitor out, or engage in its own research and return to predatory pricing long enough to force the competitor out of business. Critics argue that the empirical evidence shows that "predatory pricing" does not work in practice and is better defeated by a truly free market than by antitrust laws (see Criticism of

26026-474: The upper dozen or so top-rated programs" and "The popular programs, to put the matter bluntly, have very little appeal for him." RCA professional video cameras and studio gear, particularly of the TK-40/41 series, became standard equipment at many American television network affiliates, as RCA CT-100 ("RCA Merrill" to dealers) television sets introduced color television to the public. In 1941, shortly before

26195-474: The view that if the enterprise (as an economic entity) has not acquired a monopoly position, or has significant market power , then no harm is done. The same rationale has been extended to joint ventures , where corporate shareholders make a decision through a new company they form. In Texaco Inc. v. Dagher the Supreme Court held unanimously that a price set by a joint venture between Texaco and Shell Oil did not count as making an unlawful agreement. Thus

26364-510: The war, RCA set up several new divisions for defense, space exploration and other activities. The RCA Service Corporation provided large numbers of staff for the Distant Early Warning (DEW) Line . RCA units won five Army–Navy "E" Awards for Excellence in production. Due to the hostilities between Japan and the United States during World War II , the Victor Company of Japan became an independent company after seceding from RCA Victor in

26533-458: The whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create

26702-403: Was adopted as the standard for the United States. At that time, Sarnoff predicted annual color television sales would reach 1.78 million in 1956, but the receivers were expensive and difficult to adjust, and there was initially a lack of color programming, so sales lagged badly and the actual 1956 total would only be 120,000. RCA's ownership of NBC proved to be a major benefit, as that network

26871-663: Was an early supplier of electronics designed for the printing and publishing industries. It contracted with German company Rudolf Hell to market adaptations of the Digiset photocomposition system as the Videocomp, and a Laser Color Scanner. The Videocomp was supported by a Spectra computer that ran the Page-1 and, later the Page-II and FileComp composition systems. RCA later sold the Videocomp rights to Information International Inc. RCA Victor became

27040-682: Was held that, unlike baseball, boxing was not exempt, and in Radovich v. National Football League (NFL) , professional football is generally subject to antitrust laws. As a result of the AFL-NFL merger , the National Football League was also given exemptions in exchange for certain conditions, such as not directly competing with college or high school football. However, the 2010 Supreme Court ruling in American Needle Inc. v. NFL characterised

27209-497: Was instructed to promote its color program offerings; even so, it was not until 1968 that color television sales in the United States surpassed those of black-and-white sets. While lauding the technical prowess of his RCA engineers who had developed color television, David Sarnoff, in marked contrast to William Paley, president of CBS, did not disguise his dislike for popular television programs. His authorized biography even boasted that "no one has yet caught him in communion with one of

27378-820: Was made with the American Telephone & Telegraph Company (AT&T), which purchased 500,000 shares of RCA, although it would divest these shares in early 1923. The United Fruit Company held a small portfolio of radio patents and signed two agreements in 1921. GE's traditional electric company rival, the Westinghouse Electric & Manufacturing Corporation , had also purchased rights to some critical patents, including one for heterodyne receiving originally issued to Reginald Fessenden , plus regenerative circuit and superheterodyne receiver patents issued to Edwin Armstrong . Westinghouse used this position to negotiate

27547-420: Was not limited to transport refrigeration products, however. Some of the additional products the company built and sold included milk coolers, golf carts, school desks and shopping carts. On March 5, 1966, a group of 75 people associated with the company were among the 113 passengers and 11 crew members who died when BOAC Flight 911 crashed near Mount Fuji, Japan. Company executives and their top dealers were on

27716-505: Was now restricted to the labels and album covers of RCA's regular popular record releases, while the Nipper/"His Master's Voice" trademark was seen only on the album covers of Red Seal records. In 1969, the company name was officially changed from Radio Corporation of America to the RCA Corporation , to reflect its broader range of corporate activities and expansion into other countries. At

27885-643: Was reacquired by General Electric in 1986. This was during the Jack Welch era of GE and Welch began selling off or liquidating most of RCA's assets, retaining only NBC and government services. Today, RCA exists as a brand name only; the various RCA trademarks are currently owned by Sony Music Entertainment and Vantiva , which in turn license the RCA brand name and trademarks to several other companies, including Voxx International , Curtis International, AVC Multimedia, TCL Corporation and Express LUCK International, Ltd. for their various products. RCA originated as

28054-503: Was responsible for creating a series of innovative products, ranging from octal base metal tubes co-developed with General Electric before World War II, to miniaturized Nuvistor tubes used in the tuners of the New Vista series of television receivers. The company began work on a secret project for the U.S. Navy called Madame X in September 1942. The Bloomington, Indiana, plant was one of

28223-611: Was seen as the "Bill of Rights" for labor, as the Act laid down that the "labor of a human being is not a commodity or article of commerce". The purpose was to ensure that employees with unequal bargaining power were not prevented from combining in the same way that their employers could combine in corporations , subject to the restrictions on mergers that the Clayton Act set out. However, sufficiently autonomous workers, such as professional sports players have been held to fall within antitrust provisions. Second, professional sports leagues enjoy

28392-501: Was the first mainframe, demand paging, virtual memory operating system on the market. By 1971, despite a significant investment, RCA had only a 4% market share, and it was estimated that it would cost around $ 500 million over the next five years to remain competitive with the IBM/370 series. On September 17, 1971, the RCA board of directors announced its decision to close its computer systems division (RCA-CSD), which would be written off as

28561-462: Was to keep prices low, not high. The court found that this was not true, but stated that not every "restraint of trade" in a literal sense could be unlawful. Just as under the common law, the restraint of trade had to be "unreasonable". In Chicago Board of Trade v. United States the Supreme Court found a "good" restraint of trade. The Chicago Board of Trade had a rule that commodities traders were not allowed to privately agree to sell or buy after

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