By-laws of the Associated Press, a cooperative association
engaged in gathering and distributing news in interstate and
foreign commerce, prohibited service of AP news to nonmembers,
prohibited members from furnishing spontaneous news to nonmembers,
and empowered members to block membership applications of
competitors. A contract between AP and a Canadian press association
obligated both to furnish news exclusively to each other. Charging,
inter alia, that the bylaws and the contract violated the
Sherman Antitrust Act, the Government sought an injunction against
AP and member publishers. Upon the Government's motion, the
District Court rendered summary judgment.
Held:
1. The bylaws and the contract, together with the admitted
facts, justified summary judgment. Rule 56 of the Rules of Civil
Procedure. P.
326 U. S. 5.
2. Publishers charged with violating the Sherman Act are
subject, no less than others, to the summary judgment procedure. P.
326 U. S. 7.
3. The bylaws, on their face, constitute restraints of trade and
violate the Sherman Act. P.
326 U. S. 12.
(a) That AP had not achieved a complete monopoly is irrelevant.
P.
326 U. S. 12.
Page 326 U. S. 2
(b) Trade in news carried on among the States is interstate
commerce. P.
326 U. S. 14.
(c) The fact that AP's activities are cooperative does not
render the Sherman Act inapplicable. P.
326 U. S. 14.
(d) Although true in a general sense that an owner of property
may dispose of it as he pleases, he can not go beyond the exercise
of that right and, by contracts or combinations, express or
implied, unduly hinder or obstruct the free flow of interstate
commerce. P.
326 U. S. 15.
(e) The fact that there are other news agencies which sell news,
and that AP's reports are not "indispensable," can give AP's
restrictive bylaws no exemption under the Sherman Act. P.
326 U. S. 17.
(f) The result here does not involve an application of the
"public utility" concept to the newspaper business. P.
326 U. S. 19.
(g) Arrangements or combinations designed to stifle competition
can not be immunized through a membership device which would
accomplish that purpose. P.
326 U. S. 19.
(h) Application of the Sherman Act to a combination of
publishers to restrain trade in news does not abridge the freedom
of the press guaranteed by the First Amendment. Pp.
326 U. S.
19-20.
4. The decree of the District Court, interpreted as meaning that
AP news is to be furnished to competitors of members without
discrimination through bylaws controlling membership or otherwise,
is not vague and indefinite, and is approved. P.
326 U. S. 21.
5. The District Court did not err in refusing to hold as a
violation of the Sherman Act standing alone (1) the bylaws
provision forbidding service of AP news to nonmembers, (2) the
bylaws provision forbidding AP members from furnishing spontaneous
news to nonmembers, or (3) the Canadian press contract; and the
court was justified in enjoining their observance temporarily
pending AP's abandonment of the bylaws provision empowering members
to block membership applications of competitors. P.
326 U. S. 21.
6. The fashioning of a decree in an antitrust case, to prevent
future violations and eradicate existing evils, rests largely in
the discretion of the trial court. P.
326 U. S. 22.
7. The case having been presented on the narrow issues arising
out of undisputed facts, it cannot be said that the District
Court's decree should have been broader, and, if the decree in its
present form should prove inadequate to prevent further
discriminatory trade restraints against nonmember newspapers, the
District Court's retention of jurisdiction of the cause will enable
it to take appropriate action. P.
326 U. S. 22.
52 F.
Supp. 362, affirmed.
Page 326 U. S. 3
Appeals from a decree of a district court of three judges in a
suit by the United States to enjoin alleged violations of the
Sherman Act.
MR. JUSTICE BLACK delivered the opinion of the Court.**
The publishers of more than 1,200 newspapers are members of the
Associated Press (AP), a cooperative
Page 326 U. S. 4
association incorporated under the Membership Corporations Law
of the State of New York. Its business is the collection, assembly
and distribution of news. The news it distributes is originally
obtained by direct employees of the Association, employees of the
member newspapers, and the employees of foreign independent news
agencies with which AP has contractual relations, such as the
Canadian Press. Distribution of the news is made through interstate
channels of communication to the various newspaper members of the
Association, who pay for it under an assessment plan which
contemplates no profit to AP.
The United States filed a bill in a Federal District Court for
an injunction against AP and other defendants charging that they
had violated the Sherman Anti-Trust Act, 26 Stat. 209, in that
their acts and conduct constituted (1) a combination and conspiracy
in restraint of trade and commerce in news among the states, and
(2) an attempt to monopolize a part of that trade.
The heart of the government's charge was that appellants had, by
concerted action, set up a system of bylaws which prohibited all AP
members from selling news to nonmembers, and which granted each
member powers to block its nonmember competitors from membership.
These bylaws, to which all AP members had assented, were, in the
context of the admitted facts, charged to be in violation of the
Sherman Act. A further charge related to a contract between AP and
Canadian Press (a news agency of Canada similar to AP) under which
the Canadian agency and AP obligated themselves to furnish news
exclusively to each other. The District Court, composed of three
judges, held that the bylaws unlawfully restricted admission to AP
membership, and violated the Sherman Act insofar as the bylaws'
provisions clothed a member with powers to impose or dispense with
conditions upon the admission of his business competitor.
Page 326 U. S. 5
Continued observance of these bylaws was enjoined. The court
further held that the Canadian contract was an integral part of the
restrictive membership conditions, and enjoined its observance
pending abandonment of the membership restrictions. The
government's motion for summary judgment, under Rule 56 of the
Rules of Civil Procedure, [
Footnote
1] was granted, and its prayer for relief was granted in part
and denied in part.
52 F. Supp.
362. Both sides have brought the case to us on direct appeal.
15 U.S.C. § 29; 28 U.S.C. § 345.
At this point, it seems advisable to pass upon the contention of
the appellants that there were genuine disputes as to material
facts, and that the case therefore should have gone to trial. The
only assignments of error made by the appellants in No. 57
(
Associated Press et al. v. United States), relating to
this question are that the court erred "[i]n holding that there was
no genuine issue between the parties as to any material fact" and
"[i]n not entering summary judgment against the plaintiff." This
latter assignment is based on the premise that summary proceedings
were properly utilized in the case. The appellants in No. 58
(
Tribune Company et al. v. United States) have one
assignment of error to the effect that
"[t]he defendants are entitled to a trial of genuine issues of
fact unmentioned in the findings of the court but which if found
for the defendants would render this holding unwarranted."
None of the appellants has pointed to any
Page 326 U. S. 6
disputed facts essential to a determination of the validity or
invalidity of the bylaws and the contract. Admitting the existence
of both the bylaws and the contract, their answers and their
affidavits in the summary proceedings defended the legality of the
restrictive arrangements, but did not in any instance deny that
nonmembers of AP were denied access to news of AP and of all of its
member publishers by reason of the concerted arrangements between
the appellants. Nor was it denied that the bylaws granted AP
members powers to impose restrictive conditions upon admission to
membership of nonmember competitors. The court below, in making
findings and entering judgment, carefully abstained from the
consideration of any evidence which might possibly be in dispute.
We agree that Rule 56 should be cautiously invoked to the end that
parties may always be afforded a trial where there is a
bona
fide dispute of facts between them.
Sartor v. Arkansas
Nat. Gas. Co., 321 U. S. 620.
There was no injury to any of the appellants as a result of the
summary proceedings, since, for reasons to be indicated, the
restrictive arrangements, which appellants admitted, were
sufficient to justify summary action by the court at that stage of
the case. In reaching our conclusion on the summary judgment
question, we are not unmindful of the argument that newspaper
publishers charged with combining cooperatively to violate the
Sherman Act are entitled to have a different and more favorable
kind of trial procedure than all other persons covered by the Act.
No language in the Sherman Act or the summary judgment statute
lends support to the suggestion. There is no single element in our
traditional insistence upon an equally fair trial for every person
from which any such discriminatory trial practice could stem. For
equal -- not unequal -- justice under law is the goal of our
society. Our legal system has not established different measures of
proof for the trial of cases in which equally intelligent and
responsible
Page 326 U. S. 7
defendants are charged with violating the same statutes. Member
publishers of AP are engaged in business for profit exactly as are
other business men who sell food, steel, aluminum, or anything else
people need or want.
See International News Service v.
Associated Press, 248 U. S. 215,
248 U. S. 229,
248 U. S. 230.
All are alike covered by the Sherman Act. The fact that the
publisher handles news, while others handle food, does not, as we
shall later point out, afford the publisher a peculiar
constitutional sanctuary in which he can with impunity violate laws
regulating his business practices.
Nor is a publisher who engages in business practices made
unlawful by the Sherman Act entitled to a partial immunity by
reason of the "clear and present danger" doctrine which courts have
used to protect freedom to speak, to print, and to worship. That
doctrine, as related to this case, provides protection for
utterances themselves, so that the printed or spoken word may not
be that subject of previous restraint or punishment unless their
expression creates a clear and present danger of bringing about a
substantial evil which the government has power to prohibit.
Bridges v. California, 314 U. S. 252,
314 U. S. 261.
Formulated as it was to protect liberty of thought and of
expression, it would degrade the clear and present danger doctrine
to fashion from it a shield for business publishers who engage in
business practices condemned by the Sherman Act. Consequently, we
hold that publishers, like all others charged with violating the
Sherman Act, are subject to the provisions of the summary judgment
statute. And that means that such judgments shall not be rendered
against publishers or others where there are genuine disputes of
fact on material issues. Accordingly, we treat the cause as did the
court below, and will consider the validity of the bylaws and the
contract exclusively on the basis of their terms and the background
of facts which the appellants admitted.
Page 326 U. S. 8
To put the issue into proper focus, it becomes necessary at this
juncture to examine the bylaws.
All members must consent to be bound by them. They impose upon
members certain duties and restrictions in the conduct of their
separate businesses. For a violation of the bylaws, severe
disciplinary action may be taken by the Association. The Board of
Directors may impose a fine of.$1,000.00 or suspend a member, and
such "action . . . shall be final and conclusive. No member shall
have any right to question the same." [
Footnote 2] The offending member may also be expelled by
the members of the corporation for any reason
"which, in its absolute discretion, it shall deem of such a
character as to be prejudicial to the welfare of the corporation
and its members, or to justify such expulsion. The action of the
regular members of the corporation in such regard shall be final,
and there shall be no right of appeal against or review of such
action."
These bylaws, for a violation of which members may be thus
fined, suspended, or expelled, require that each
Page 326 U. S. 9
newspaper member publish the AP news regularly in whole or in
part, and that each shall
"promptly furnish to the corporation, through its agents or
employees, all the news of such member's district, the area of
which shall be determined by the Board of Directors. [
Footnote 3]"
All members are prohibited from selling or furnishing their
spontaneous news to any agency or publisher except to AP. Other
bylaws require each newspaper member to conduct his or its business
in such manner that the news furnished by the corporations shall
not be made available to any nonmember in advance of publication.
The joint effect of these bylaws is to block all newspaper
nonmembers from any opportunity to buy news from AP or any of its
publisher members. Admission to membership in AP thereby becomes a
prerequisite to obtaining AP news or buying news from any one of
its more than twelve hundred publishers. The erection of obstacles
to the acquisition of membership consequently can make it
difficult, if not impossible, for nonmembers to get any of the news
furnished by AP or any of the individual members of this
combination of American newspaper publishers. [
Footnote 4]
The bylaws provide a very simple and nonburdensome road for
admission of a noncompeting applicant. The Board of Directors in
such case can elect the applicant without payment of money or the
imposition of any other onerous terms. In striking contrast are the
bylaws
Page 326 U. S. 10
which govern admission of new members who do compete.
Historically, as well as presently, applicants who would offer
competition to old members have a hard road to travel. This appears
from the following facts found by the District Court.
AP originally functioned as an Illinois corporation, and at that
time an existing member of the Association had an absolute veto
power over the applications of a publisher who was or would be in
competition with the old member. The Supreme Court of Illinois held
that AP, thus operated, was in restraint of trade.
Inter-Ocean
Publishing Co. v. Associated Press, 184 Ill. 438, 56 N.E. 822.
As a result of this decision, the present Association was organized
in New York. Under the new bylaws, the unqualified veto power of
the Illinois AP members was changed into a "right of protest"
which, when exercised, prevented the AP directors from electing the
applicants as in other cases. The old member's protest against his
competitor's application could then be overruled only by the
affirmative vote of four-fifths of all the members of AP.
In 1931, the bylaws were amended so as to extend the right of
protest to all who had been members for more than 5 years and upon
whom no right of protest had been conferred by the 1900 bylaws. In
1942, after complaints to the Department of Justice had brought
about an investigation, the bylaws were again amended. These
bylaws, presently involved, leave the Board of Directors free to
elect new members unless the applicants would compete with old
members, and, in that event, the Board cannot act at all in the
absence of consent by the applicant's member competitor. Should the
old member object to admission of his competitor, the application
must be referred to a regular or special meeting of the
Association. As a prerequisite to election, he must (a) pay to the
Association 10% of the total amount of the regular assessments
received by it from old members in the same
Page 326 U. S. 11
competitive field during the entire period from October 1, 1900,
to the first day of the month preceding the date of the election of
the applicant, [
Footnote 5] (b)
relinquish any exclusive rights the applicant may have to any news
or news picture services, and, when requested to do so by his
member competitor in that field, must
"require the said news or news picture services, or any of them,
to be furnished to such member or members, upon the same terms as
they are made available to the applicant,"
and (c) receive a majority vote of the regular members who vote
in person or by proxy. These obstacles to membership, and to the
purchase of AP news, only existed where there was a competing old
member in the same field.
The District Court found that the bylaws, in and of themselves,
were contracts in restraint of commerce [
Footnote 6] in that they contained provisions designed
to stifle competition in the newspaper publishing field. [
Footnote 7] The court also
Page 326 U. S. 12
found that AP's restrictive bylaws had hindered and impeded the
growth of competing newspapers. [
Footnote 8] This latter finding, as to the past effect of
the restrictions, is challenged. We are inclined to think that it
is supported by undisputed evidence, but we do not stop to labor
the point. For the court below found, and we think correctly, that
the bylaws, on their face, and without regard to their past effect,
constitute restraints of trade. Combinations are no less unlawful
because they have not as yet resulted in restraint. An agreement or
combination to follow a course of conduct which will necessarily
restrain or monopolize a part of trade or commerce may violate the
Sherman Act, whether it be "wholly nascent or abortive on the one
hand, or successful on the other." [
Footnote 9] For
Page 326 U. S. 13
these reasons the argument, repeated here in various forms, that
AP had not yet achieved a complete monopoly is wholly irrelevant.
Undisputed evidence did show, however, that its bylaws had tied the
hands of all of its numerous publishers, to the extent that they
could not and did not sell any part of their news so that it could
reach any of their nonmember competitors. In this respect, the
Court did find, and that finding cannot possibly be challenged,
that AP's bylaws had hindered and restrained the sale of interstate
news to nonmembers who competed with members.
Inability to buy news from the largest news agency or any one of
its multitude of members can have most serious effects on the
publication of competitive newspapers, both those presently
published and those which, but for these restrictions, might be
published in the future. [
Footnote 10] This is illustrated by the District Court's
finding that, in 26 cities of the United States, existing
newspapers already have contracts for AP news and the same
newspapers have contracts with United Press and International News
Service under which new newspapers would be required to pay the
contract holders large sums to enter the field. [
Footnote 11] The net effect is seriously to
limit the opportunity of any newspaper to enter these cities. Trade
restraints of this character, aimed at the destruction of
competition, tend to block the initiative which brings newcomers
into a field
Page 326 U. S. 14
of business and to frustrate the free enterprise system which it
was the purpose of the Sherman Act to protect. [
Footnote 12]
We need not again pass upon the contention that trade in news
carried on among the states is not interstate commerce,
Associated Press v. Labor Board, 301 U.
S. 103, or that, because AP's activities are
cooperative, they fall outside the sphere of business,
American
Medical Ass'n v. United States, 317 U.
S. 519,
317 U. S. 528.
It is significant that, when Congress has desired to permit
cooperatives to interfere with the competitive system of business,
it has done so expressly by legislation. [
Footnote 13]
Nor can we treat this case as though it merely involved a
reporter's contract to deliver his news reports exclusively to a
single newspaper, or an exclusive agreement as to news between two
newspapers in different cities. For such trade restraints might
well be "reasonable," and therefore not in violation of the Sherman
Act.
Standard Oil Co. v. United States, 221 U. S.
1. But however innocent such agreements might be,
standing alone, they would assume quite a different aspect if
utilized as essential features of a program to hamper or destroy
competition. It is in this light that we must view this case.
It has been argued that the restrictive bylaws should be treated
as beyond the prohibitions of the Sherman Act, since the owner of
the property can choose his associates and can, as to that which he
has produced by his own enterprise and sagacity, efforts or
ingenuity, decide for
Page 326 U. S. 15
himself whether and to whom to sell or not to sell. While it is
true in a very general sense that one can dispose of his property
as he pleases, he cannot
"go beyond the exercise of this right, and by contracts or
combinations, express or implied, unduly hinder or obstruct the
free and natural flow of commerce in the channels of interstate
trade."
United States v. Bausch & Lomb Co., 321 U.
S. 707,
321 U. S. 722.
The Sherman Act was specifically intended to prohibit independent
businesses from becoming "associates" in a common plan which is
bound to reduce their competitor's opportunity to buy or sell the
things in which the groups compete. Victory of a member of such a
combination over its business rivals achieved by such collective
means cannot, consistently with the Sherman Act or with practical,
everyday knowledge, be attributed to individual "enterprise and
sagacity"; such hampering of business rivals can only be attributed
to that which really makes it possible -- the collective power of
an unlawful combination. That the object of sale is the creation or
product of a man's ingenuity does not alter this principle.
Fashion Originators' Guild, Inc., v. Federal Trade
Commission, 312 U. S. 457,
668. [
Footnote 14] It is
obviously fallacious to view the bylaws
Page 326 U. S. 16
here in issue as instituting a program to encourage and permit
full freedom of sale and disposal of property by its owners.
Rather, these publishers have, by concerted arrangements, pooled
their power to acquire, to purchase, and to dispose of news reports
through the channels of commerce. They have also pooled their
economic and news control power and, in exerting that power, have
entered into agreements which the District Court found to be
"plainly designed in the interest of preventing competition."
[
Footnote 15]
Page 326 U. S. 17
It is further contended that, since there are other news
agencies which sell news, it is not a violation of the Act for an
overwhelming majority of American publishers to combine to decline
to sell their news to the minority. But the fact that an agreement
to restrain trade does not inhibit competition in all of the
objects of that trade cannot save it from the condemnation of the
Sherman Act. [
Footnote 16]
It is apparent that the exclusive right to publish news in a given
field furnished by AP and all of its members gives many newspapers
a competitive advantage over their rivals. [
Footnote 17] Conversely, a newspaper without AP
service is
Page 326 U. S. 18
more than likely to be at a competitive disadvantage. The
District Court stated that it was to secure this advantage over
rivals that the bylaws existed. It is true that the record shows
that some competing papers have gotten along without AP news, but
morning newspapers, which control 96% of the total circulation in
the United States, have AP news service. And the District Court's
unchallenged finding was that
"AP is a vast, intricately reticulated organization, the largest
of its kind, gathering news from all over the world, the chief
single source of news for the American press, universally agreed to
be of great consequence."
Nevertheless, we are asked to reverse these judgments on the
ground that the evidence failed to show that AP reports, which
might be attributable to their own "enterprise and sagacity," are
clothed "in the robes of indispensability." The absence of
"indispensability" is said to have been established under the
following chain of reasoning: AP has made its news generally
available to the people by supplying it to a limited and select
group of publishers in the various cities; therefore, it is said,
AP and its member publishers have not deprived the reading public
of AP news; all local readers have an "adequate access" to AP news,
since all they need do in any city to get it is to buy, on whatever
terms they can in a protected market, the particular newspaper
selected for the public by AP and its members. We reject these
contentions. The proposed "indispensability" test would fly in the
face of the language of the Sherman Act and all of our previous
interpretations of it. Moreover, it would make that law a dead
letter in all fields of business, a law which Congress has
consistently maintained to be an essential safeguard to the kind of
private competitive business economy this country has sought to
maintain.
The restraints on trade in news here were no less than those
held to fall within the ban of the Sherman Act with
Page 326 U. S. 19
reference to combinations to restrain trade outlets in the sale
of tiles,
Montague & Co. v. Lowry, 193 U. S.
38; or enameled ironware,
Standard Sanitary Mfg. Co.
v. United States, 226 U. S. 20,
226 U. S. 48-49;
or lumber,
Eastern States Retail Lumber Dealers' Assn. v.
United States, 234 U. S. 600,
234 U. S. 611;
or women's clothes,
Fashion Originators' Guild v. Federal Trade
Commission, supra; or motion pictures,
United States v.
Crescent Amusement Co., 323 U. S. 173.
Here, as in the
Fashion Originators' Guild case,
supra, 312 U. S.
465,
"the combination is, in reality, an extra-governmental agency
which prescribes rules for the regulation and restraint of
interstate commerce and provides extrajudicial tribunals for
determination and punishment of violations, and thus 'trenches upon
the power of the national legislature and violates the statute.'
Addyston Pipe & Steel Co. v. United States,
175 U. S.
211,
175 U. S. 242."
By the restrictive bylaws, each of the publishers in the
combination has, in effect, "surrendered himself completely to the
control of the association,"
Anderson v. Shipowners'
Ass'n, 272 U. S. 359,
272 U. S. 362,
in respect to the disposition of news in interstate commerce.
Therefore, this contractual restraint of interstate trade,
"designed in the interest of preventing competition," cannot be one
of the "normal and usual agreements in aid of trade and commerce
which may be found not to be within the [Sherman] Act. . . ."
Eastern States Retail Lumber Dealers' Assn. v. United States,
supra, 234 U. S. 612,
234 U. S. 613.
It is further said that we reach our conclusion by application of
the "public utility" concept to the newspaper business. This is not
correct. We merely hold that arrangements or combinations designed
to stifle competition cannot be immunized by adopting a membership
device accomplishing that purpose.
Finally, the argument is made that to apply the Sherman Act to
this association of publishers constitutes an abridgment of the
freedom of the press guaranteed by the First Amendment. Perhaps it
would be a sufficient answer to
Page 326 U. S. 20
this contention to refer to the decisions of this Court in
Associated Press v. Labor Board, supra, and
Indiana
Farmer's Guide Co. v. Prairie Farmer Co., 293 U.
S. 268. It would be strange indeed however if the grave
concern for freedom of the press which prompted adoption of the
First Amendment should be read as a command that the government was
without power to protect that freedom. The First Amendment, far
from providing an argument against application of the Sherman Act,
here provides powerful reasons to the contrary. That Amendment
rests on the assumption that the widest possible dissemination of
information from diverse and antagonistic sources is essential to
the welfare of the public, that a free press is a condition of a
free society. Surely a command that the government itself shall not
impede the free flow of ideas does not afford nongovernmental
combinations a refuge if they impose restraints upon that
constitutionally guaranteed freedom. Freedom to publish means
freedom for all, and not for some. Freedom to publish is guaranteed
by the Constitution, but freedom to combine to keep others from
publishing is not. Freedom of the press from governmental
interference under the First Amendment does not sanction repression
of that freedom by private interests. [
Footnote 18] The First Amendment affords not the
slightest support for the contention that a combination to restrain
trade in news and views has any constitutional immunity.
Page 326 U. S. 21
We now turn to the decree. Having adjudged the bylaws imposing
restrictions on applications for membership to be illegal, the
Court enjoined the defendants from observing them, or agreeing to
observe any new or amended bylaw having a like purpose or effect.
If further provided that nothing in the decree should prevent the
adoption by the Associated Press of new or amended bylaws
"which will restrict admission, provided that members in the
same city and in the same 'field' (morning, evening or Sunday), as
an applicant published in a newspaper in the United States of
America or its Territories, shall not have power to impose, or
dispense with, any conditions upon his admission, and that the
bylaws shall affirmatively declare that the effect of admission
upon the ability of such applicant to compete with members in the
same city and 'field' shall not be taken into consideration in
passing upon its application."
Some of appellants argue that this decree is vague and
indefinite. They argue that it will be impossible for the
Association to know whether or not its members took into
consideration the competitive situation in passing upon
applications for membership. We cannot agree that the decree is
ambiguous. We assume, with the court below, that AP will faithfully
carry out its purpose. Interpreting the decree to mean that AP news
is to be furnished to competitors of old members without
discrimination through bylaws controlling membership, or otherwise,
we approve it.
The Court also held that, taken in connection with the
restrictive clauses on admissions to membership, those sections of
the bylaws violated the Sherman Act which prevented service of AP
news to nonmembers and prevented AP members from furnishing
spontaneous news to anyone not a member of the Association. It held
the agreement between AP and the Canadian Press, under which AP
secured exclusive right to receive the news reports
Page 326 U. S. 22
of the Canadian Press and its members was also, when taken in
connection with the restrictive membership agreements, in violation
of the Sherman Act. It declined to hold these bylaws and the
agreement with Canadian Press illegal standing by themselves. It
consequently enjoined their observance temporarily, pending AP's
obedience to the decree enjoining the restrictive membership
agreements. The Court's findings justified this phase of its
injunction.
United States v. Bausch & Lomb Co., supra,
321 U. S.
724.
The government has appealed from the Court's refusal to hold
each of these last mentioned items a violation of the Sherman Act
standing alone. The government also asks that the decree of the
District Court be broadened so as permanently to enjoin observance
of the Canadian Press contract and all the challenged bylaws. It
also suggests certain specific terms which should be added to the
decree to assure the complete eradication of AP's discrimination
against competitors of its members.
The fashioning of a decree in an Antitrust case in such way as
to prevent future violations and eradicate existing evils is a
matter which rests largely in the discretion of the Court.
United States v. Crescent Amusement Co., supra. A full
exploration of facts is usually necessary in order properly to draw
such a decree. In this case, the government chose to present its
case on the narrow issues which were within the realm of undisputed
facts. In the situation thus narrowly presented, we are unable to
say that the Court's decree should have gone further than it did.
Furthermore, the District Court retained the cause for such further
proceedings as might become necessary. If, as the government
apprehends, the decree in its present form should not prove
adequate to prevent further discriminatory trade restraints against
nonmember newspapers, the Court's retention of the cause will
enable it
Page 326 U. S. 23
to take the necessary measures to cause the decree to be fully
and faithfully carried out.
The judgment in all three cases is affirmed.
Affirmed.
MR. JUSTICE JACKSON took no part in the consideration or
decision of this case.
* Together with No. 58,
Tribune Company et al. v. United
States, and No. 59,
United States v. Associated Press et
al., also on appeals from the District Court of the United
States for the Southern District of New York.
** In Number 59, all the sitting Justices concur. In Numbers 57
and 58, MR. JUSTICE REED, MR. JUSTICE DOUGLAS and MR. JUSTICE
RUTLEDGE concur. MR. JUSTICE FRANKFURTER concurs in that part of
the opinion which discusses the District Court's decree, but
concurs in the judgment of affirmance in a separate opinion.
[
Footnote 1]
Rule 56 provides,
"A party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory judgment may, at any time
after the pleading in answer thereto has been served, move with or
without supporting affidavits for a summary judgment in his favor
upon all or any part thereof. . . . The judgment sought shall be
rendered forthwith if the pleadings, depositions, and admissions on
file, together with the affidavits, if any, show that, except as to
the amount of damages, there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a
matter of law."
[
Footnote 2]
The Directors who have this power to punish are elected by the
members, but each member does not have equal voting privileges in
the election. The bylaws grant one additional vote for each $25.00
of AP bonds held by a member. This means that in the election of
Directors the owner of a $1,000.00 bond can cast 40 more votes than
a member who owns no bonds. All members, however, do not, and
cannot, under restrictive provisions of the bylaws, own an equal
amount of bonds. In 1942, 99 out of 1247 members owned blocks of
bonds of the face value of $1,000.00 or more, totaling more than
50% of the outstanding bonds. The court below found on the
undisputed evidence that the bondholder vote, rather than the
membership vote, controls the selection of AP Directors. The
Directors have power to apportion among the members the expenses of
collecting and distributing news, and to levy assessments upon the
members. As to this apportionment and levy, the bylaws provide
that
"There shall be no right to question the action of the Board of
Directors in respect to such apportionment or assessments, either
by appeal to a meeting of members, or otherwise, but the action of
the Directors, when taken, shall be final and conclusive."
[
Footnote 3]
Another bylaw provides that
"The news which a member shall furnish as herein required shall
be all such news as is spontaneous in its origin, but shall not
include any news that is not spontaneous its origin, or which has
originated through deliberate and individual enterprise on the part
of such member of the newspaper specified in such member's
certificate of membership."
[
Footnote 4]
The Court found that, out of the 1803 daily English language
newspapers published in the United States, with a total circulation
of 42,080,391, 1179 of them, with a circulation of 34,762,120, were
under joint contractual obligations not to apply either AP or their
own "spontaneous" news to any nonmember of AP.
[
Footnote 5]
Under these terms, a new applicant could not have entered the
morning field in New York without paying $1,432,142.73, and in
Chicago, $416,631.90. For entering the evening field in the same
cities, it would have cost $1,095,003.21, and $595,772.31,
respectively.
[
Footnote 6]
"The bylaws of AP are, in effect, agreements between the
members: that one which restricts AP to the transmission of news to
members, and that which restricts any member to transmitting
'spontaneous' news to the association, are both contracts in
restraint of commerce. They restrict commerce because they limit
the members' freedom to relay any news to others, either the news
they learn themselves, or that which they learn collectively
through AP as their agent."
United States v. Associated Press, 52 F.
Supp. 362, 368.
[
Footnote 7]
The District Court found that, among all the news gathering
agencies in the United States, AP ranked "in the forefront in
public reputation and esteem," and that it was "the chief single
source of news for the American press, universally agreed to be of
great importance"; that the combination of AP owners acted together
for the purpose of using the news gathering facilities of the
individual publishers and of the combination, which news was made
available to members and denied to others; and that the restrictive
bylaws had been observed, carried out, and applied in practice. The
Court declared that the conditions which old members could impose
upon new applicants for membership were "plainly designed in the
interests of preventing competition," and that the requirement of
payments from new members to competing old members
"were also designed to compensate competitors for the loss in
value of their membership, arising out of the applicant's improved
position as a competitor."
The Court pointed out that these restrictive provisions would
"act as a deterrent", and might "prove a complete bar to the
admission of [membership]."
[
Footnote 8]
That finding is as follows:
"The growth of news agencies has been fostered to some extent as
a result of the restrictions of The Associated Press' services to
its own members, but other restrictions imposed by The Associated
Press have hampered and impeded the growth of competing news
agencies and of newspapers competitive with members of The
Associated Press."
The Court's opinion, and its findings as a whole show that the
"other restrictions" found to have hampered competition were those
relating to admissions to membership in AP and to restraints upon a
member's freedom to sell his news.
[
Footnote 9]
United States v. Socony-Vacuum Oil Co., 310 U.
S. 150,
310 U. S. 225.
See also United States v. Trenton Potteries Co.,
273 U. S. 392,
273 U. S. 402;
Fashion Originators' Guild of America, Inc. v. Federal Trade
Commission, 312 U. S. 457,
312 U. S. 466,
668;
United States v. Patten, 226 U.
S. 525,
226 U. S. 543;
Paramount Famous Lasky Corp. v. United States,
282 U. S. 30,
282 U. S. 41;
Standard Oil Co. v. United States, 221 U. S.
1,
221 U. S.
65-66.
[
Footnote 10]
The District Court found as a fact that
"It is practically impossible for any one newspaper alone to
establish or maintain the organization requisite for collecting all
of the news of the world, or any substantial part thereof; aside
from the administrative and organization difficulties thereof, the
financial cost is so great that no single newspaper acting alone
could sustain it."
[
Footnote 11]
INS and UP make so-called "asset value" contracts under which,
if another newspaper wishes to obtain their press services, the
newcomer shall pay to the competitor holding the UP or INS contract
the stipulated "asset value."
[
Footnote 12]
Paramount Famous Lasky Corp. v. United States, supra,
282 U. S. 42,
quoted
United States v. Colgate & Co., 250 U.
S. 300,
250 U. S. 307,
to the following effect:
"The purpose of the Sherman Act is to prohibit monopolies,
contracts and combinations which probably would unduly interfere
with the free exercise of their rights by those engaged, or who
wish to engage, in trade and commerce -- in a word, to preserve the
right of freedom to trade."
[
Footnote 13]
See, e.g., 7 U.S.C. §§ 291, 292, as to farm
cooperatives; 15 U.S.C. § 17, as to labor organizations.
But
see also, as to the latter,
Apex Hosiery Co. v.
Leader, 310 U. S. 469,
310 U. S.
487-498.
[
Footnote 14]
It is argued that the decision in
Board of Trade v. Christie
Grain & Stock Co., 198 U. S. 236,
requires a holding that these arrangements are consistent with the
Sherman Act. In that case, the Board of Trade gathered "quotations"
of the prices on sales of grain for future delivery and sold the
"information" under agreements forbidding the purchasers to reveal
it. The Board of Trade filed suit to prevent its purchasers from
breaking this agreement by transmitting the statistics to a "bucket
shop or place where they are used as a basis for bets or illegal
contracts," p.
198 U. S. 246.
It was said in the opinion that the statistics were in the nature
of a "trade secret." The opinion stated that the Board's collection
of statistical information was entitled to the protection of the
laws; that it had a right to keep it to itself, and that it did
not
"lose its rights by communicating the result to persons, even if
many, in confidential relations to itself, under a contract not to
make it public, and strangers to the trust will be restrained from
getting at the knowledge by inducing a breach of trust, and using
knowledge obtained by such a breach."
Of course, one who has created or acquired something of value
has a general right to use it according to the dictates of his own
discretion, but this right of ownership is measured by the
limitations of law, and the Sherman Act, which obviously restricts
the free and untrammeled use of property, in the public interest,
is a clear and pointed instance of the non-absolute character of
property rights. An argument to the contrary was expressly rejected
in
Fashion Originators' Guild v. Federal Trade Commission,
supra, 312 U. S. 467,
312 U. S.
468.
Furthermore, the contracts involved in the
Christie
case were "not relied on as a cause of action." This Court found
that those contracts did not show a purpose to deny sale of the
statistics to nonmembers of the Board of Trade. Whether such a
contractual restriction would have violated the Sherman Act, the
Court refused to decide. In the instant case, as we have pointed
out, both the individual publishers and AP have bound themselves to
furnish their news to each other and to deny it to all others. Two
later cases repeated the statement as to the right of one who
gathered statistics to sell them on conditions. Neither of them,
however, decided that such restrictive arrangements as appear in
the instant case would not constitute unreasonable restraints of
trade.
Moore v. New York Cotton Exchange, 270 U.
S. 593;
Hunt v. New York Cotton Exchange,
205 U. S. 322.
[
Footnote 15]
Even if additional purposes were involved, it would not justify
the combination, since the Sherman Act cannot
"be evaded by good motives. The law is its own measure of right
and wrong, of what it permits or forbids, and the judgment of the
courts cannot be set up against it in a supposed accommodation of
its policy with the good intention of parties, and, it may be, of
some good results."
Standard Sanitary Mfg. Co. v. United States,
226 U. S. 20,
226 U. S.
49.
[
Footnote 16]
United States v. Socony-Vacuum Oil Co., Inc., supra,
310 U. S. 221,
310 U. S.
224.
This Court said in
Paramount Famous Lasky Corp. v. United
States, supra, 282 U. S. 44,
"In order to establish violation of the Sherman Anti-Trust Act,
it is not necessary to show that the challenged arrangement
suppresses all competition between the parties, or that the parties
themselves are discontented with the arrangement. The interest of
the public in the preservation of competition is the primary
consideration."
Again, in
Fashion Originators' Guild v. Federal Trade
Commission, supra, 312 U. S. 466,
we said,
"Nor is it determinative in considering the policy of the
Sherman Act that petitioners may not yet have achieved a complete
monopoly. For 'it is sufficient if it really tends to that end, and
to deprive the public of the advantages which flow from free
competition.'
United States v. E. C. Knight Co.,
156 U. S.
1,
156 U. S. 16;
Addyston Pipe
& Steel Co. v. United States, 175 U. S.
211,
175 U. S. 237."
See also Apex Hosiery Co. v. Leader, 310 U.
S. 469,
310 U. S.
485.
[
Footnote 17]
The District Court pointed out that
"monopoly is a relative word. If one means by it the possession
of something absolutely necessary to the conduct of an activity,
there are few except the exclusive possession of some natural
resource without which the activity is impossible. Most monopolies,
like most patents, give control over only some means of production
for which there is a substitute; the possessor enjoys an advantage
over his competitors, but he can seldom shut them out altogether;
his monopoly is measured by the handicap he can impose. . . . And
yet that advantage alone may make a monopoly unlawful. It would be
possible, for instance, to conduct some kind of a newspaper without
any news service whatever; but nobody will maintain that, if AP
were the only news service in existence, the members could keep it
wholly to themselves and reduce all other papers to such news as
they could gather by their own efforts."
United States v. Associated Press, 52 F.
Supp. 362, 371.
[
Footnote 18]
It is argued that the decree interferes with freedom "to print
as and how one's reason or one's interest dictates." The decree
does not compel AP or its members to permit publication of anything
which their "reason" tells them should not be published. It only
provides that, after their "reason" has permitted publication of
news, they shall not, for their own financial advantage, unlawfully
combine to limit its publication. The only compulsion to print
which appears in the record is found in the bylaws, previously set
out, which compel members of the Association to print some AP news
or subject themselves to fine or expulsion from membership in the
Association.
MR. JUSTICE DOUGLAS, concurring.
I join in the opinion of the Court. But, in view of the broader
issues which have been injected into the discussion of the case, I
add a few words to indicate what I deem to be the narrow compass of
the decision.
Every exclusive arrangement in the business or commercial field
may produce a restraint of trade. A manufacturer who has only one
retail outlet for his product may be said to restrain trade in the
sense that other retailers are prevented from dealing in the
commodity. And to a degree, the same kind of restraint may be found
wherever a reporter is gathering news exclusively for one
newspaper. But
Standard Oil Co. v. United States,
221 U. S. 1,
construed the Sherman Act to include not every restraint, but only
those which were unreasonable. Starting from that premise, I assume
that it would not be a violation of the Sherman Act if a newspaper
in Seattle and one in New York made an agency agreement whereby
each was to furnish exclusively to the other news reports from his
locality.
But such an exclusive arrangement, though innocent standing
alone, might be part of a scheme which would violate the Sherman
Act in one of two respects.
(1) It might be a part of the machinery utilized to effect a
restraint of trade in violation of § 1 of the Act.
Cf. United
States v. Bausch & Lomb Co., 321 U.
S. 707. I think the exclusive arrangement employed by
the Associated Press had such a necessary effect. As developed in
the opinion of the Court, the bylaws of the Associated
Page 326 U. S. 24
Press were aimed at the competitors of the Associated Press'
members; their necessary effect was to hinder or impede competition
with members of the combination. The District Court not only
ordered the bylaws to be revised; it enjoined continuance of the
exclusive arrangement until the restraint effected by the bylaws
had been eliminated. That was plainly within its power. For it is
well settled that a feature of an illegal restraint of trade, which
is innocent by itself and which may be lawfully used if
independently established, may be uprooted along with the other
parts of an illegal arrangement.
Ethyl Gasoline Corp. v. United
States, 309 U. S. 436,
309 U. S. 461;
United States v. Univis Lens Co., 316 U.
S. 241,
316 U. S. 254.
We certainly cannot say that the District Court abused its
discretion in adopting that course here as an interim measure
pending a revision of the bylaws.
(2) Such an exclusive arrangement as we have here might result
in the growth of a monopoly in the furnishing of news, in the
access to news, or in the gathering or distribution of news. Those
are business activities subject to the Sherman Act (
Indiana
Farmers' Guide Co. v. Prairie Farmer Co., 293 U.
S. 268), as well as other Acts of Congress regulating
interstate commerce.
Associated Press v. Labor Board,
301 U. S. 103. The
District Court found that, in its present stage of development, the
Associated Press had no monopoly of that character. Those findings
are challenged here in the appeal taken by the United States. They
are not reached in the present decision for the reason, discussed
in the opinion of the Court, that they cannot be tried out on a
motion for a summary judgment. The decree which we approve does not
direct Associated Press to serve all applicants. It goes no further
than to put a ban on Associated Press' practice of discriminating
against competitors of its members in the same field or territory.
That entails not only a discontinuance of the practice for the
future, but an undoing of the wrong which has been
Page 326 U. S. 25
done. If Associated Press, after the effects of that
discrimination have been eliminated, freezes its membership at a
given level, quite different problems would be presented. Whether
that would result in a monopoly in violation of § 1 of the Act is
distinct from the issue in this case.
Only if a monopoly were shown to exist would we be faced with
the public utility theory which has been much discussed in
connection with this case and adopted by MR. JUSTICE FRANKFURTER.
The decrees under the Sherman Act directed at monopolies have
customarily been designed to break them up or dissolve them.
See United States v. Crescent Amusement Co., 323 U.
S. 173. There have been some exceptions. Thus, in
United States v. Terminal Railroad Ass'n, 224 U.
S. 383, an action was brought under the Sherman Act to
dissolve a combination among certain railroads serving St. Louis.
The combination had acquired control of all available facilities
for connecting railroads on the east bank of the Mississippi with
those on the west bank. The Court held that, as an alternative to
dissolution, a plan should be submitted which provided for equality
of treatment of all railroads.
And see United States v. Great
Lakes Towing Co., 208 F. 733, 747;
id., 217 F. 656,
appeal dismissed, 245 U.S. 675;
United States v. New
England Fish Exchange, 258 F. 732. Whether that procedure
would be appropriate in this type of case or should await further
legislative action (
cf. Mr. Justice Brandeis' dissenting
opinion,
International News Service v. Associated Press,
248 U. S. 215,
248 U. S. 248,
248 U. S. 262)
is a considerable question the discussion of which should not cloud
the present decision. What we do today has no bearing whatsoever on
it.
MR. JUSTICE FRANKFURTER, concurring.
The District Court properly applied the Sherman Law in enjoining
the defendants from continuing to enforce
Page 326 U. S. 26
the existing bylaws restricting membership in the Associated
Press, and further enjoining the enforcement of another restrictive
bylaw forbidding Associated Press members to communicate
"spontaneous" news to nonmembers. I would sustain the judgment
substantially for the reasons given below by Judge Learned Hand.
52 F. Supp.
362.
The Associated Press is, in essence, the common agent of about
1300 newspapers in the various cities throughout the country for
the interchange of news which each paper collects in its own
territory, and for the gathering, editing, and distributing of news
which these member papers cannot collect single-handed, and which
requires their pooled resources. The historic development of this
agency, its world-wide scope, the pervasive influence it exerts in
obtaining and disseminating information, the country's dependence
upon it for news of the world -- all these are matters of common
knowledge, and have been abundantly spread upon the records of this
Court.
International News Service v. Associated Press,
248 U. S. 215;
Associated Press v. Labor Board, 301 U.
S. 103.
See Desmond, The Press and World
Affairs (1937) Chapters I, II, III.
The bylaws in controversy operate, in substance, as a network of
agreements among the members of the Associated Press whereby they
mobilize the interest of all against the danger of competition to
each by a present or future rival -- to the extent that inability
to obtain an Associated Press "franchise" is a serious factor in
the competition between papers in the same city. While a member
newspaper no longer has an absolute veto power in the denial of
facilities of the Associated Press service to a rival paper
applying for membership, for practical purposes, there remain
effective barriers to admission to the Associated Press based
solely on grounds of business competition. As Judge Learned Hand
has pointed out, the abatement in the bylaw from a former absolute
veto to a
Page 326 U. S. 27
conditional veto against an applicant competing with an existing
member
"by no means opened membership to all those who would be
entitled to it, if the public has an interest in its being free
from exclusion for competitive reasons, and if that interest is
paramount. Although, as we have said, only a few members will have
any direct personal interest in keeping out an applicant, the rest
will not feel free to judge him regardless of the effect of his
admission on his competitors. Each will know that the time may come
when he will himself be faced with the application of a competitor.
. . . A bylaw which leaves it open to members to vote solely as
their self-interest may dictate disregards whatever public interest
may exist."
52 F.
Supp. 362, 370, 371.
Indubitably, then, we have here arrangements whereby members of
the Associated Press bind one another from selling local news to
nonmembers and exercise power, which reciprocal self-interest
invokes, to help one another in keeping out competitors from
membership in the Associated Press, with all the advantages that it
brings to a newspaper. Since the Associated Press is an enterprise
engaged in interstate commerce,
Associated Press v. Labor
Board, supra, these plainly are agreements in restraint of
that commerce. But ever since the Sherman Law was saved from
stifling literalness by "the rule of reason,"
Standard Oil Co.
v. United States, 221 U. S. 1;
United States v. American Tobacco Co., 221 U. S.
106, it is not sufficient to find a restraint. The
decisive question is whether it is an unreasonable restraint. This
depends, in essence, on the significance of the restraint in
relation to a particular industry.
Compare Chicago Board of
Trade v. United States, 246 U. S. 231,
246 U. S.
238.
To be sure, the Associated Press is a cooperative organization
of members who are "engaged in a commercial business for profit."
Associated Press v. Labor Board, supra, at
301 U. S. 128.
But in addition to being a commercial
Page 326 U. S. 28
enterprise, it has a relation to the public interest unlike that
of any other enterprise pursued for profit. A free press is
indispensable to the workings of our democratic society. The
business of the press, and therefore the business of the Associated
Press, is the promotion of truth regarding public matters by
furnishing the basis for an understanding of them. Truth and
understanding are not wares like peanuts or potatoes. And so, the
incidence of restraints upon the promotion of truth through denial
of access to the basis for understanding calls into play
considerations very different from comparable restraints in a
cooperative enterprise having merely a commercial aspect. I find
myself entirely in agreement with Judge Learned Hand that
"neither exclusively, nor even primarily, are the interests of
the newspaper industry conclusive, for that industry serves one of
the most vital of all general interests: the dissemination of news
from as many different sources, and with as many different facets
and colors as is possible. That interest is closely akin to, if
indeed it is not the same as, the interest protected by the First
Amendment; it presupposes that right conclusions are more likely to
be gathered out of a multitude of tongues than through any kind of
authoritative selection. To many, this is, and always will be,
folly, but we have staked upon it our all."
52 F.
Supp. 362, 372.
From this point of view, it is wholly irrelevant that the
Associated Press itself has rival news agencies. As to ordinary
commodities, agreements to curtail the supply and to fix prices are
in violation of the area of free enterprise which the Sherman Law
was designed to protect. The press in its commercial aspects is
also subject to the regulation of the Sherman Law.
Indiana
Farmers' Guide Co. v. Prairie Farmer Co., 293 U.
S. 268. But the freedom of enterprise protected by the
Sherman Law necessarily has different aspects in relation to the
press than in the case of ordinary commercial pursuits. The
interest of
Page 326 U. S. 29
the public is to have the flow of news not trammeled by the
combined self-interest of those who enjoy a unique constitutional
position precisely because of the public dependence on a free
press. A public interest so essential to the vitality of our
democratic government may be defeated by private restraints no less
than by public censorship.
Equally irrelevant is the objection that it turns the Associated
Press into a "public utility" to deny to a combination of
newspapers the right to treat access to their pooled resources as
though they were regulating membership in a social club. The
relation of such restraints upon access to news and the relation of
such access to the function of a free press in our democratic
society must not be obscured by the specialized notions that have
gathered around the legal concept of "public utility."
The short of the matter is that the bylaws which the District
Court has struck down clearly restrict the commerce which is
conducted by the Associated Press, and the restrictions are
unreasonable because they offend the basic functions which a
constitutionally guaranteed free press serves in our nation.
MR. JUSTICE ROBERTS, dissenting in part.
I think the judgment should be reversed. In respect of most of
the questions involved, I might rest on the discussion by Judge
Swan in his dissenting opinion in the District Court. The novelty
and importance of the questions, and the summary disposition of
them in the court's opinion, have, however, moved me to state my
views in detail.
This case deals with "news." News is information about matters
of general interest. The term has been defined as "a report of a
recent event." The report may be made to one moved by curiosity or
to one who wishes to make some
Page 326 U. S. 30
practical use of it. Newspapers obtain such reports and publish
them as a part of a business conducted for profit. The proprietor
of a newspaper, when he employs a person to inquire and report,
engages personal service. I suppose no one would deny that he is
entitled to the exclusive use of the report rendered as a result of
the service for which he contracts and pays. I suppose that one
rendering such service is free to contract with his employer that
the product of his inquiries -- the news he furnishes his employer
-- shall be used solely by the employer and not imparted to
another.
As I have said, news is the result of effort in the
investigation of recent events. Every newspaper is interested in
procuring news of happenings in its vicinity, and maintains a staff
for that purpose. Such news may have some value to newspapers
published in cities outside the locality of the occurrence. I
assume that if two publishers agreed that each should supply a
transcript of all reports he received to the other, and conditioned
their agreement that neither would abuse the privilege accorded by
giving away or selling what was furnished under the joint
arrangement, there could be no objection under the Sherman Act. I
had assumed, although the opinion appears to hold otherwise, that
such an arrangement would not be obnoxious to the Sherman Act
because many, rather than few, joined in it. I think that the
situation would be no different if a machinery were created to
facilitate the exchange of the news procured by each of the
participants such as a partnership, an unincorporated association,
or a nonprofit corporation.
I assume it cannot be questioned that two or more persons
desirous of obtaining news may agree to employ a single reporter,
or a staff of reporters, to furnish them news, and agree amongst
themselves that, as they share the expense involved, they
themselves will use the fruit of
Page 326 U. S. 31
the service and will not give it away or sell it. Although the
procedure has obvious advantages, and is in itself innocent, I do
not know, from the opinion of the court, whether it would be held
that the inevitable or necessary operation, or necessary
consequence of such an arrangement is to restrain competition in
trade or commerce, and that it is, consequently, illegal. [
Footnote 2/1] Many expressions in the
opinion seem to recognize that all AP does is to keep for its
members that which, at joint expense, its members and employes have
produced -- its reports of world events. Thus, it is said that
nonmembers are denied access to AP news, not, be it observed, to
news. Again it is said that the bylaws "block all newspaper
nonmembers from any opportunity to buy news from AP or any of its
publisher members"; again, that
"the erection of obstacles to the acquisition of membership . .
. can make it difficult, if not impossible for nonmembers to get
any of the news furnished by AP. . . ."
If these expressions stood alone as the factual basis of
decision, we should know that the court is condemning a joint
enterprise for the production of something -- here, news copy --
which those who produce it intend to use for their exclusive
benefit. But it is impossible to deduce from the opinion that this
is the
ratio of decision.
I do not understand that the court's decision is pitched on the
fact that AP is a membership corporation. The same result could be
attained by resort to a multi-party contract, to a partnership, or
to an unincorporated association. The choice of the form of the
cooperative
Page 326 U. S. 32
enterprise does not affect the nature of the problem presented.
[
Footnote 2/2]
AP was created to accomplish on a mutual, nonprofit, basis the
two objects mentioned. Its purpose is stated by its charter as
"[t]he collection and interchange, with greater economy and
efficiency, of information and intelligence for publication in the
newspapers of its members."
The organization started on a comparatively modest basis, to
facilitate exchange of news reports amongst its members. It has
grown into a cooperatively maintained news reporting agency having,
in addition, its own reporters and agencies for the collection,
arrangement, editing, and transmission to its members, of news,
gathered by its employees, and those of others with whom it
contracts.
The question is whether the Sherman Act precludes such a
cooperative arrangement and renders those who participate liable to
furnish news copy, on equal terms, to all newspapers which desire
it, as the court below has held. If so, it must be because the
joint arrangement constitutes a contract, combination or conspiracy
in restraint of trade, or a monopolization, or an attempt or
combination or conspiracy to monopolize part or all of some branch
of interstate or international trade or commerce or is a public
utility subject to regulation. If AP's activities fall within the
denunciation of the statute it must be because the members (1) have
combined with the purpose to restrain trade by destroying
competition or (2), even though their intent was innocent, have set
up a combination which either (a) tends unreasonably to restrain,
or (b) has in fact resulted, in undue and unreasonable restraint of
free competition in trade or commerce; or (3) intended and
attempted to monopolize a part or all of a branch of trade;
Page 326 U. S. 33
or (4) have created an organization of such proportions that in
fact it has such a monopoly; or (5) have created an agency which
the Sherman Act renders a public utility subject to regulation
notwithstanding the guarantees of the First Amendment of the
Constitution.
I am unable to determine on which of such possible grounds the
judgment of illegality is rested. The court's opinion blends and
mingles statements of fact, inferences and conclusions, and
quotations from prior opinions wrested from their setting and
context, in such fashion that I find it impossible to deduce more
than that orderly analysis and discussion of facts relevant to any
one of the possible methods of violation of the Sherman Act is
avoided, in the view that separate consideration would disclose a
lack of support for any finding of specific wrongdoing. But the
general principle that nothing added to nothing will not add up to
something holds true in this case. It is a tedious task to separate
the generalities thus mingled in the opinion, but I can only essay
it by discussing one aspect of the case at a time.
In limine, it should be remembered that newspaper
proprietors who are members of AP are not, as publishers, in the
trade of buying or selling news. Their business is the publishing
of newspapers. In this business, they print,
inter alia,
news, editorial comment, special articles, photographs, and
advertisements. It has been held that a joint effort to obtain
advertising to be published in all the papers parties to the
arrangement, at special rates, is not a violation of the Sherman
Act. [
Footnote 2/3] It has been
repeatedly held by this court that the collection of information on
behalf of the membership of an unincorporated association, and the
furnishing of that information for pay to such persons as the
association decides shall share it, is not a violation of
Page 326 U. S. 34
the Sherman Act. [
Footnote 2/4]
I think this is not because the exclusive right to use information
or news copy obtained differs somewhat from property rights in
tiles or lumber or pipe or women's fashions or motion picture film.
I think it is because information gathered as the result of effort,
or of compensation paid the gatherer, is protected as is property
until published, and that unauthorized publication by another is a
wrong redressable in the same way as unauthorized interference with
one's rights in tangible property. In the very case of AP, this
court has so held, [
Footnote 2/5]
as has the Attorney General of the United States. [
Footnote 2/6] As the Attorney General has pointed
out, this proposition is subject to the qualification that there
must be no purpose to destroy competition or to monopolize, but
with these matters I shall deal hereafter.
First. Are the members of AP acting together with the
purpose of destroying competition? I have not discovered any
allegation in the complaint to that effect. The court below has not
made any such finding. They deny any such purpose or intent and
yet, as I read passages in the court's opinion, it is now found, on
this summary judgment record, without a trial, that they are, and
have been, actuated by such an intent. The opinion states
"An
Page 326 U. S. 35
agreement or combination to follow a course of conduct which
will necessarily restrain or monopolize a part of trade or
commerce, may violate the Sherman Act whether it be 'wholly nascent
or abortive, on the one hand, or successful, on the other."
I take this statement as suggesting the pleadings and proof
disclose without contradiction, that AP and its members agreed or
combined to restrain trade. There is no such allegation in the
complaint, and there is not, and cannot be, any finding on this
record to support the conclusion. The cases cited in the opinion of
agreements to boycott or to drive competitors out of business, or
to compel merchants to deal only with members of a group, are, as
will appear, inapposite to the case at bar. The defendants say that
they merely keep for their own members' use that which their own
members' activity and expenditure has produced. We must not confuse
the intent of the members with the size of their organization.
These two matters seem to be inextricably blended in the court's
treatment of the case, but they differ in their nature and as a
basis for decision.
But, it may be urged, intent is to be gathered from conduct, and
those whose actions have in fact unduly restrained trade will not
be heard to deny the purpose to accomplish the result of their
conduct. This is sound doctrine, and it leads to an inquiry as to
the actual imposition of prohibited restraints.
Second. Has the plan and have the operations of AP the
inevitable consequence of restraining competition between news
agencies or newspapers, or have they, and do they now, necessarily
tend to, or, in fact, unreasonably restrain such competition? On
this question, the court below made no findings save one of dubious
import.
It is worthwhile to quote the finding to which the opinion of
this court refers.
"The growth of news agencies has been fostered to some extent as
a result of the restrictions of The Associated
Page 326 U. S. 36
Press' services to its own members, but
other
restrictions imposed by The Associated Press have hampered and
impeded the growth of competing news agencies and of newspapers
competitive with members of The Associated Press."
(Italics supplied.)
The finding is vague, for it fails to specify what is meant by
"other restrictions." The phrase cannot mean the membership
restrictions of the bylaws, for those are mentioned in the
preceding clause. Nor does this court's opinion furnish any
additional light.
Not only is the finding attacked, as the court's opinion admits,
but, in addition, the record negatives the sweeping assumptions the
court indulges respecting the effect of AP's activities.
The opinion states that the members
"have, by concerted arrangements, pooled their power to acquire,
to purchase, and to dispose of news reports through the channels of
commerce,"
and, in addition, have
"pooled their economic and news control power and, in exerting
that power, have entered into agreements which the District Court
found to be 'plainly designed in the interest of preventing
competition.'"
This sentence is characteristic of the opinion. In the first
place, as will later appear, the record presents no question of
"purchasing power." One cannot purchase the events of history; he
can employ someone to report them to him. Does the sentence mean
that AP has "purchased" all or most of the available reporters in
the nation or the world? Secondly, the sentence seems to attribute
to AP some sort of monopolization of the newspaper publishing
business. And, finally, it seems to attribute to the court below a
finding that AP has unduly or unreasonably restrained trade. As
will appear, the court below made no such finding, and, because it
could not do so, sought another ground on which to base its
decision. Moreover, the facts assumed are specifically denied by
the answer, and contradicted by the proofs.
Page 326 U. S. 37
The uncontradicted proofs to which I shall later refer show that
nonmember publishers not only have obtained, and now obtain,
complete and satisfactory news coverage from other agencies, but
have prospered and grown without AP news service.
It is said in the opinion that the bylaws, as obstacles to
membership, tend to make it difficult to obtain news furnished by
AP or its members, and that it is apparent that the exclusive right
which AP members have gives many newspapers a competitive advantage
over their rivals. But the events of life are open to all who
inquire. There is no dearth of those willing to inquire and report
those events for proper compensation. Thus the court must here be
holding that, if a concern gathers from the air, from the sunlight,
or from the waters of the sea, by its effort and ingenuity,
something that others have not garnered, it must make the results
of its activity open to all, for if it sells to some and not to
others, the former will have a competitive advantage. The exclusive
use of that which is thus obtained always, in a sense, gives a
competitive advantage over those less active and enterprising. The
opinion seems to mean that no contract, however narrow its effect,
however innocent its purpose, which in the least degree restricts
competition [
Footnote 2/7] can
survive attack under the Sherman Act; that no such concept as a
reasonable restraint, a restraint limited to the legitimate
protection of one's property or business, and limited in space or
in time, or affecting a few only of all those engaged in a given
trade, is free of illegality. Is not this to reestablish the harsh
and sweeping effect attributed to the statute in
United States
v. Trans-Missouri Freight Association, 166 U.
S. 290, and
United States v. Joint Traffic
Association, 171 U. S. 505,
which was abandoned more than thirty years ago for the view, ever
since maintained, that the statute
Page 326 U. S. 38
merely adopted the common law concept of undue and unreasonable
restraints of trade? [
Footnote 2/8]
If the court is now to revert to the harsh and mechanical
application of the act that every agreement which in any measure
restrains trade (notwithstanding the truism that "every agreement
concerning trade . . . restrains" [
Footnote 2/9]) is illegal, the ruling should be made
explicit and not left in the realm of speculation.
The opinion says that the District Court found that the bylaws
"contained provisions designed to stifle competition in the
newspaper publishing field." The District Court made no finding,
and reached no conclusion that AP imposed any restraint which was
undue or unreasonable, and the matter quoted in footnotes
6 and |
6 and S. 1fn8|>8 of the court's opinion does not
support any such gloss as this court places on what the District
Court said in its opinions or its formal findings and conclusions,
as a mere reading will demonstrate.
If collateral restraints in agreements for the sale of a
business, and others of like sort, permitted and enforced at common
law, and heretofore under the Sherman Act [
Footnote 2/10] as well, are now to fall under
condemnation, we should know the fact.
The opinion assumes that the competitors of AP suffer from an
inability to buy news. It is replete with intimations
Page 326 U. S. 39
that the cooperative activities of AP have, in fact, seriously
impeded the founding and growth of other news gathering agencies
than AP and its member news gathering agencies and other newspapers
than AP's member newspapers. They are too many for enumeration, but
may be illustrated by the court's statement that "historically, as
well as presently, applicants who would offer competition to old
members have a hard road to travel," and that "a newspaper without
AP service is more than likely to be at a competitive
disadvantage."
These conclusions are without support in the record or in the
findings of the court below, and are unsupported by any finding by
this court based upon the facts of record. This can be
demonstrated.
The findings of the District Court, which this court has not
modified, criticized, or overruled, establish beyond cavil that,
despite the fact that AP was early in the field and has grown to
great size, many other reporting agencies have been established,
and grown in the United States, two of which, UP and INS, are now
comparable to AP "in size, scope of coverage and efficiency."
Additional agencies which furnish substantial news reporting
services in the nation total between twenty and thirty. Statistics
concerning them are not included in the record, but it is evident
that some, singly, furnish substantial service, and all, taken
together, afford a broad coverage in competition with AP, UP and
INS, widely used in the newspaper world. Their past growth, and
their opportunity for expansion, contradict the assumption that AP
has unreasonably, or in substantial measure, restrained free
competition. Rather, its success has stimulated others to enter the
field and to compete with it.
The District Court found: "AP does not prevent or hinder
nonmember newspapers from obtaining access to domestic and foreign
happenings and events." Newspaper publishers differ as to the
comparative value of AP
Page 326 U. S. 40
and other services; many choose one in preference to the other;
some have relinquished one service and acquired the other. Vast
newspaper enterprises have grown up which depend on services other
than those furnished by AP. These include metropolitan newspapers
with circulations running from two hundred thousand to over a
million. Some which have not used AP reports have outstripped
competitors who were members of AP.
The uncontradicted evidence and the findings of the District
Court disclose, amongst others, the following significant facts: in
1942, the total expenditures of AP and its subsidiaries were
$12,986,000, those of UP and its affiliates $8,628,000 and those of
INS and its affiliates $9,434,000. Thus, two competitors, found by
the court below to be in every way comparable with AP, together
expended over $5,000,000 more in that year than AP. In the same
year, AP had 1,247 domestic and 5 foreign members, UP had 981
domestic and 391 foreign subscribers to its services, and INS, in
1941, 338 domestic newspaper subscribers and 3 such foreign
subscribers. Here again, the total subscribers of its two most
substantial competitors outnumbered AP's membership in both the
domestic and the foreign field. In the matter of supplying
features, news pictures, and news to radio stations, UP and INS
would each appear to have at least as many users as AP, although
the proofs and the findings do not afford an accurate measure of
comparison.
Many of the other agencies, as well as UP and INS, make
contracts with their subscribers for the exclusive use of their
material in the subscriber's area and field. Both UP and INS make
what are known as "asset value" contracts with their subscribers
under the terms of which any newspaper in the same area and field
must pay to the existing subscriber the asset value of that
subscriber's contract in order to obtain the service. Thus, all
these agencies recognize that the exclusive right to publish
the
Page 326 U. S. 41
news furnished their members or subscribers is valuable. Neither
as respects AP, nor any of the other agencies, is there a finding
or evidence that such provisions work any hindrance or restraint of
competition as between agencies or newspapers.
As respects competition between newspapers which are members of
AP and others, it is found that newspapers of large circulation in
large municipalities, as well as those of medium and small
circulation, have thriven and grown without AP service. The court
below said:
"Upon this motion, we must take it as in dispute whether the
general opinion in the calling is that the service of UP is better
than that of AP, or vice versa."
Newspapers have given up AP service for that of its competitors.
Many, in varying localities and fields, not only belong to AP but
patronize one or more of the other services, including UP and INS.
Some of the largest and most powerful newspapers in the nation have
grown to be such without AP service; not an instance is cited where
a proposed newspaper was unable to start, or has been compelled to
suspend, publication for lack of it. The record contradicts the
assertion in the court's opinion that the proof demonstrates "the
net effect is seriously to limit the opportunity of any new paper
to enter these cities." No finding in these terms was made by the
District Court. A great bulk of the material tendered by the
defendants runs counter to the conclusion and certainly, in a
summary judgment proceeding, to draw such a conclusion from the
averments pro and con of the pleadings and affidavits, is to ignore
what this court has said is permissible in such a proceeding.
The court below has found that,
"at the present time, access to the news reports of
one or
more of AP, UP, or INS is essential to the successful conduct
of any substantial newspaper serving the general reading
public."
(Italics supplied.) It is true also that the District Court
found, referring to these three agencies, that, "of the three
news
Page 326 U. S. 42
agencies . . . AP ranks in the forefront in public reputation
and esteem," whatever this may mean. If it means that it is thought
the best of the three, this would not seem to advance the argument.
If it means that AP is the largest of the three in expenditures,
this also is true, but irrelevant. Whatever the significance of the
finding, it certainly is not a finding that AP has restricted or
limited competition either between news agencies or newspapers.
In another aspect of the issue of restraint, the opinion ignores
important facts. While it correctly states that, in the daily
morning field, AP embraces 81% in number and 96% in circulation, it
fails to state that UP serves such newspapers representing 40% in
number and 64% in circulation. Again, in respect of the daily
evening field, whereas AP members represent 59% in number and 77%
in circulation, UP accounts for 45% in number and 65% in
circulation. It will be seen that there is duplication because many
newspapers take more than one of the existing services. Thus, as of
1941, of the 373 domestic morning English language dailies -- with
a total circulation of 15,849,132 -- 152, with a total circulation
of 10,701,498, were subscribers of UP and 55, with a total
circulation of 4,149,929, were subscribers of INS; and, of the
1,480 domestic daily evening English language newspapers -- with a
total circulation of 19,616,674 -- 664, with a total circulation of
16,781,020, were subscribers of UP and 206, with a total
circulation of 8,608,180, were subscribers of INS.
The record indicates that, in the large, the events reported by
the leading agencies are the same; the differences between the
reports being in the way they are written. Inability to peruse an
AP report, therefore, does not mean that the reader fails to obtain
knowledge of what is happening, but of a particular reporter's
account of the event.
Finally, the record contains affidavits which must, on the
motion for summary judgment, be taken as true, of
Page 326 U. S. 43
twenty-three persons who are in the newspaper business. These
are too lengthy to quote. In general, the testimony was to this
effect: ten said the UP service was adequate and complete; thirteen
said that AP service was not necessary to the success of a
newspaper; one said that a newspaper was at no competitive
disadvantage through lack of AP service; and five testified their
papers, to which AP membership was open, elected to use competing
services. As of September, 1941, more than 600 domestic newspapers
which were subscribers of UP were not members of AP. The fact is
that AP does not attempt to restrain its members from taking
services from other agencies. It is little wonder that the District
Court refrained from finding that AP had unduly or unreasonably
restrained competition between news agencies or newspapers.
I conclude, therefore, that there is no justification for a
holding that the operations of AP must inevitably result, or that
its activities have in fact resulted, in any undue and unreasonable
restraint of free competition in any branch of trade or
commerce.
Third. Have AP and its members intended, or attempted,
to monopolize a branch of trade? As I have already pointed out, the
events happening in the world are as open to all men as the air or
the sunlight. The only agency required to report them is a human
being who will inquire. Surely the supply of reporters is not less
difficult to monopolize than the events to be reported.
The court below reached conclusions as to monopoly which were
required by the record:
"AP does not monopolize or dominate the furnishing of news
reports, news pictures, or features to newspapers in the United
States."
"AP does not monopolize or dominate access to the original
source of news."
"AP does not monopolize or dominate transmission facilities for
the gathering or distribution of news reports, news pictures, or
features. "
Page 326 U. S. 44
If the opinion of this court means to suggest that, while the
news can be gathered by anyone, because no one has, or can have, a
monopoly of the events of history, AP monopolizes the services of
those who report news which its energies and efforts have employed
and trained (which is not shown), then, I submit, we have a new
concept of monopolization, namely, that where some person, out of
materials open to all, creates his own product by hiring persons to
produce it, that person may not determine to whom he will sell and
from whom he will withhold the product. Such a concept can only be
justified on the public utility theory upon which the court below
proceeded, of which I shall say something later.
In spite of the quoted conclusions of the District Court (and no
facts are cited in this court's opinion which negative their
accuracy), I must take it that the court intends to hold that the
pleadings and proofs disclose, without question, an intent or
attempt to monopolize.
I have quoted the finding made below that AP does not prevent or
hinder nonmember newspapers from obtaining access to domestic or
foreign news. The facts and figures I have cited above indicate no
intent or attempt to absorb the entire field of news gathering and
reporting, to exclude all others from the field, or to take over
the entire field, to the end that no newspaper or combination of
newspapers can obtain reports of the news. Paragraph 3 of the
complaint charges an attempt to monopolize a part of trade and
commerce and a combination and conspiracy to monopolize the same.
The answer specifically denies the allegation. The amazing growth
of competing agencies, and their size, would seem to indicate that
any such supposed intent or attempt had been ill served by the
operations of AP. At all events, there is no room in a summary
judgment proceeding, based on the facts of record, for any such
finding.
Fourth. Have the defendants created an organization of
such proportions as in fact to monopolize any part of trade
Page 326 U. S. 45
or commerce? In answering the inquiry, I need do little more
than refer to the facts already summarized. The opinion seeks
support for a holding of monopolization by referring to a finding
of the District Court in these words:
"AP is a vast, intricately, reticulated organization, the
largest of its kind, gathering news from all over the world, the
chief single source of news for the American press, universally
agreed to be of great consequence."
It may be conceded that the descriptive adjectives are not ill
chosen, but the record would support a like finding with reference
to UP and INS, save for the phrases "largest of its kind," and
"chief." And, upon a full trial, it may well be that evidence
produced would induce significant findings with respect to size and
organization of other existing news agencies. Until now, it has
been unquestioned that size alone does not bring a business
organization within the condemnation of the Sherman Act. [
Footnote 2/11] And any consideration as
to size would equally hold true whether the defendant is a single
corporation dealing with many persons in trade or commerce or an
instrumentality set up by a number of business enterprises to serve
them all on a cooperative basis. The argument of the Government
seems to assume that UP and INS, independent corporations, in spite
of their size, are not monopolies or attempts to monopolize because
they deal at arm's length with their patrons, whereas there is
something sinister about AP because it deals on the same terms with
its own members. I cannot perceive how, if AP falls within the
denunciation of the statute, UP and INS do not equally, and by the
same test. No significant feature of the practices of the one is
absent in those of the others.
Fifth. The court's opinion, under the guise of
enforcing the Sherman Act, in fact renders AP a public utility
subject
Page 326 U. S. 46
to the duty to serve all on equal terms. This must be so,
despite the disavowal of any such ground of decision. The District
Court made this public utility theory the sole basis of decision,
because it was unable to find support for a conclusion that AP
either intended or attempted to, or in fact did, unreasonably
restrain trade or monopolize or attempt to monopolize all or any
part of any branch of trade within the decisions of this court
interpreting and applying the Sherman Act. Realizing the lack of
support for any other, the Government urges that the District
Court's ground of decision is sound, and that this court should
adopt it. Judge Swan, in his dissent below, has sufficiently
disposed of this point, [
Footnote
2/12] and I refer to his opinion, in which I concur, without
quoting or paraphrasing it.
Suffice it to say that it is a novel application of the Sherman
Act to treat it as legislation converting an organization, which
neither restrains trade nor monopolizes it, nor holds itself out to
serve the public generally, into a public utility because it
furnishes a new sort of illumination -- literary, as contrasted
with physical -- by pronouncing a fiat that the interest of
consumers -- the reading public -- not that of competing news
agencies or newspaper publishers -- requires equal service to all
newspapers on the part of AP, and that a court of equity, in the
guise of an injunction, shall write the requisite regulatory
statute. This is government by injunction with a vengeance.
Moreover, it is to make a new statute by court decision. The
Sherman Act does not deal with public utilities as such. They may
violate the Act, as may persons engaged in private business. But
that Act never was intended, and has never before been thought, to
require a private corporation, not holding itself out to serve the
public, whose operations neither were intended to nor tended
unreasonably to restrain or monopolize trade, to fulfill the
duty
Page 326 U. S. 47
incident to a public calling, of serving all applicants on equal
terms.
For myself, I prefer to entrust regulatory legislation of
commerce to the elected representatives of the people, instead of
freezing it in the decrees of courts less responsive to the public
will. I still believe that "the courts are without authority either
to declare such policy, or, when it is declared by the legislature,
to override it." [
Footnote
2/13]
But more, the courts are unfit instruments to make and implement
such policy. A wise judge has said in a case brought by AP to
redress the alleged wrong of INS in "pirating" AP's news: [
Footnote 2/14]
"Courts are ill equipped to make the investigations which should
precede a determination of the limitations which should be set upon
any property right in news or of the circumstances under which news
gathered by a private agency should be deemed affected with a
public interest. Courts would be powerless to prescribe the
detailed regulations essential to full enjoyment of the rights
conferred or to introduce the machinery required for enforcement of
such regulations. Considerations such as these should lead us to
decline to establish a new rule of law in the effort to redress a
newly disclosed wrong, although the propriety of some remedy
appears to be clear."
The considerations which led to the conclusion are persuasively
stated in the preceding pages of the cited opinion.
The opinion asserts that, whatever the court below has said,
this court does not adopt its reasons for the decree entered, but
sustains its act on upon the basis of restraint and monopoly
violative of a prohibitory law. I think, however, this is too
superficial a conclusion. The fact remains, as the court below
concedes, that the role essayed "is ordinarily
legislative.'"
[Footnote 2/15]
Page 326 U. S.
48
From now on, AP is to operate under the tutelage of the court.
It is ordered to submit for approval a revision of its bylaws, and,
unless the court approves the changes, it is to be restrained from
contracting with its members that they shall not disclose the news
it furnishes, and from continuing its existing contract relations
with a Canadian news agency, both of which are held, in and of
themselves and apart from the alleged illegalities of the bylaws,
innocent and legal. However the bylaws may be amended, and whatever
judicial blessing may be given the new text, it is certain that
every refusal to deal with any newspaper will evoke a fresh
exercise of the judicial guardianship. Lawful practices may be
threatened with injunction, as they are in the present decree, as a
lever to compel obedience in some respect thought important by the
court.
The decree may well result not in freer competition, but in a
monopoly in AP or UP, or in some resulting agency, and thus force
full and complete regimentation of all news service to the people
of the nation. The decree here approved may well be, and I think
threatens to be, but a first step in the shackling of the press,
which will subvert the constitutional freedom to print or to
withhold, to print as and how one's reason or one's interest
dictates. When that time comes, the state will be supreme, and
freedom of the state will have superseded freedom of the individual
to print, being responsible before the law for abuse of the high
privilege.
It is not protecting a freedom, but confining it, to prescribe
where and how and under what conditions one must impart the
literary product of his thought and research. This is fettering the
press, not striking off its chains.
The existing situation with respect to radio points the moral of
what I have said. In that field, Congress has imposed regulation
because, in contrast to the press, the physical channels of
communication are limited, and chaos would result from unrestrained
and unregulated use of
Page 326 U. S. 49
such channels. But, in imposing regulation, Congress has
refrained from any restraint on ownership of news or information or
the right to use it. And any regulation of this major source of
information, in the light of the constitutional guarantee of free
speech, should be closely and jealously examined by the courts.
The court goes far afield in citing
Associated Press v.
Labor Board, 301 U. S. 103, and
Indiana Farmer's Guide Co. v. Prairie Farmer Co.,
293 U. S. 268, as
justifying the decree. Apart from the fact that the policy and the
implementing regulation involved in the Associated Press case was
that declared by Congress, not court-made, it is plain from the
opinion that the freedom to publish or to refrain from publishing,
the control of its news by AP and the entire conduct of its
business, save only its duty to deal with employees as a class, was
untouched. [
Footnote 2/16] In the
Farmer's Guide case, all that was decided was that the
newspapers there in question were engaging in interstate commerce,
and that newspapers, like other business enterprises, can violate
the Sherman Act by unreasonably restraining or monopolizing
commerce in more than one state. I should be the last to deny the
correctness of these propositions. But, as I have already said,
when that case came to be retried, it was found that the concert of
action in joint solicitation of advertising and granting a reduced
rate for it if placed in all the journals in the combination
violated none of the provisions of the Act. [
Footnote 2/17]
THE CHIEF JUSTICE joins in this opinion.
[
Footnote 2/1]
The argument drawn from the Congressional exemption of farmers'
cooperatives from the sweep of the Sherman Act falls short, since
such cooperatives often are not mere joint purchasing agencies of
things needed and used by the members, but are marketing agencies
which may be thought to restrain commerce and tend toward monopoly.
It was to safeguard the latter sort of activity that the exemption
was granted.
[
Footnote 2/2]
"A cooperative enterprise, otherwise free from objection which
carries with it no monopolistic menace, is not to be condemned as
an undue restraint. . . ."
Appalachian Coals, Inc. v. United States, 288 U.
S. 344,
288 U. S.
373-374.
[
Footnote 2/3]
Prairie Farmer Publishing Co. v. Indiana Farmer's Guide
Co., 88 F.2d 979,
certiorari denied, 301 U.S. 696,
rehearing denied, 302 U.S. 773.
[
Footnote 2/4]
Board of Trade v. Christie Grain & Stock Co.,
198 U. S. 236,
198 U. S. 251,
198 U. S. 252;
Hunt v. New York Cotton Exchange, 205 U.
S. 322,
205 U. S. 333;
United States v. New York C. & S. Exchange,
263 U. S. 611,
263 U. S. 619;
Moore v. New York Cotton Exchange, 270 U.
S. 593,
270 U. S. 604,
270 U. S.
607.
[
Footnote 2/5]
International News Service v. Associated Press,
248 U. S. 215.
[
Footnote 2/6]
". . . it is no violation of the Anti-Trust Act for a group of
newspapers to form an association to collect and distribute news
for their common benefit, and, to that end, to agree to furnish the
news collected by them only to each other or to the Association;
provided that no attempt is made to prevent the members from
purchasing or otherwise obtaining news from rival agencies. And if
that is true the corollary must be true, namely, that newspapers
desiring to form and maintain such an organization may determine
who shall be and who shall not be their associates."
(Letter of Attorney General Gregory of March 12, 1915).
[
Footnote 2/7]
It was only in this limited sense that the court below found
that the bylaws limited competition.
[
Footnote 2/8]
Standard Oil Co. v. United States, 221 U. S.
1,
221 U. S. 59-62;
United States v. American Tobacco Co., 221 U. S.
106,
221 U. S.
178-179;
United States v. Terminal R. Ass'n,
224 U. S. 383,
224 U. S.
394-395;
Chicago Board of Trade v. United
States, 246 U. S. 231,
246 U. S.
238-239;
Maple Flooring Mfrs. Ass'n v. United
States, 268 U. S. 563,
268 U. S. 582;
Appalachian Coals v. United States, 288 U.
S. 344,
288 U. S.
359-361,
288 U. S. 375,
288 U. S.
376-377;
Sugar Institute v. United States,
297 U. S. 553,
297 U. S.
597-600;
Interstate Circuit v. United States,
306 U. S. 208,
306 U. S.
230-232.
[
Footnote 2/9]
Chicago Board of Trade v. United States, supra,
246 U. S. 238;
Appalachian Coals v. United States, supra, 288 U. S.
361.
[
Footnote 2/10]
Oregon Steam Navigation Co. v.
Winsor, 20 Wall. 64;
Cincinnati Packet Co. v.
Bay, 200 U. S. 179,
200 U. S. 184,
200 U. S. 185;
United States v. General Electric Co., 272 U.
S. 476;
United States v. Bausch & Lomb Co.,
321 U. S. 707.
[
Footnote 2/11]
United States v. United States Steel Corp.,
251 U. S. 417,
251 U. S. 451;
United States v. International Harvester Co., 274 U.
S. 693,
274 U. S.
707.
[
Footnote 2/12]
52 F. Supp. 375.
[
Footnote 2/13]
Nebbia v. New York, 291 U. S. 502,
291 U. S.
537.
[
Footnote 2/14]
International News Service v. Associated Press,
248 U. S. 215,
248 U. S.
267.
[
Footnote 2/15]
52 F. Supp. 370.
[
Footnote 2/16]
See 301 U.S.
301 U. S.
132-133.
[
Footnote 2/17]
Supra, 326 U.S.
1fn2/3|>note 3.
MR. JUSTICE MURPHY, dissenting.
I
If it were made clear by the undisputed facts that, by adopting
their bylaws, the members of the Associated
Page 326 U. S. 50
Press were engaged in a program to hamper or destroy
competition, I could accept the decision reached by the Court. But
the evidence introduced, in my opinion, falls far short of proving
such a program, and hence the decision has grave implications
relative to governmental restraint on a free press.
As I view the situation, the members of the Associated Press
were entirely within their legal rights in forming a cooperative
organization with facilities for the collection and exchange of
news and in limiting the membership therein. Members of an
incorporated society, as a general rule, may extend the privilege
of membership or withhold it on such terms as they see fit. And if
exclusive access to these facilities and reports gave the members
of the Associated Press a competitive advantage over business
rivals who were not members, that alone would not make the
advantage unlawful. In restricting the admission of business
rivals, they were merely trying to preserve for themselves an
advantage that had accrued to them from the exercise of business
sagacity and foresight. Such an advantage, as I see it, is not a
violation of the Sherman Act. Nor does this advantage require the
Associated Press to share its products with competitors. Such a
doctrine would discourage competitive enterprise, and would carry
the antitrust laws to absurd lengths. In the words of the court
below, "a combination may be within its rights although it operates
to the prejudice of outsiders whom it excludes."
52 F.
Supp. 362, 369.
Thus, for the first time, the Court today uses the Sherman Act
to outlaw a reasonable competitive advantage gained without the
benefit of any of the evils that Congress had in mind when it
enacted this statute. On the main issue before us, the record shows
a complete absence of any monopoly, domination, price-fixing,
coercion or other predatory practices by which competition is
eliminated to the injury of the public interest.
Apex
Hosiery Co. v. Leader,
Page 326 U. S. 51
310 U. S. 469,
310 U. S.
491-501. And the District Court was unable to find
otherwise. Nothing appears save a large, successful organization
which has attempted to protect the fruits of its own enterprise
from use by competitors. To conclude on such evidence that the
Associated Press has violated the Sherman Act is to ignore the
repeated holdings of this Court that the purpose of the statute is
to maintain free competition in interstate commerce and to
eliminate only those restraints that unreasonably inhibit such
competition.
II
Today is also the first time that the Sherman Act has been used
as a vehicle for affirmative intervention by the Government in the
realm of dissemination of information. As the Government states,
this is an attempt to remove "barriers erected by private
combination against access to reports of world news." That
newspapers and news agencies are engaged in business for profit is
beyond dispute. And it is undeniable that the Associated Press and
other press associations can claim no immunity from the application
of the general laws or of the Sherman Act in particular.
Associated Press v. Labor Board, 301 U.
S. 103,
301 U. S.
132-133. But, at the same time, it is clear that they
are engaged in collecting and distributing news and information,
rather than in manufacturing automobiles, aluminum or gasoline. We
cannot avoid that fact. Nor can we escape the fact that
governmental action directly aimed at the methods or conditions of
such collection or distribution is an interference with the press,
however differing in degree it may be from governmental restraints
on written or spoken utterances themselves.
The tragic history of recent years demonstrates far too well how
despotic governments may interfere with the press and other means
of communication in their efforts to corrupt public opinion and to
destroy individual freedom.
Page 326 U. S. 52
Experience teaches us to hesitate before creating a precedent in
which might lurk even the slightest justification for such
interference by the Government in these matters. Proof of the
justification and need for the use of the Sherman Act to liberate
and remove unreasonable impediments from the channels of news
distribution should therefore be clear and unmistakable. Only then
can the precedent avoid being a dangerous one authorizing the use
of the Sherman Act for unjustified governmental interference with
the distribution of information.
This does not mean that the Associated Press is entitled to any
preferential treatment under the Sherman Act, or that the
Government must meet any higher degree of proof of a statutory
violation when dealing with the press than when dealing with any
other field of commercial endeavor. Clear and unmistakable proof of
a Sherman Act violation, especially where a summary judgment
procedure is followed, is necessary in any case. And failure to
insist upon compliance with that standard of proof is unwise under
any circumstances. But such a failure has unusually dangerous
implications when it appears with reference to an alleged violation
of the Act by those who collect and distribute information. We
should therefore be particularly vigilant in reviewing a case of
this nature, a vigilance that apparently is not shared by the Court
today.
As applied to the Sherman Act, this means that an allegation by
the Government that a monopoly or restraint of trade exists in the
business of collecting and distributing information should be
proved by clear evidence after a full canvas of all the pertinent
facts. Nothing should be left to speculation, doubt or surmise. Nor
can conjectures as to probabilities or inevitable consequences
replace proof of the actual or potential existence of monopolies or
restraints. In other words, before the Government is entitled to
enjoin a combination or conspiracy alleged to be
Page 326 U. S. 53
in restraint of news dissemination, it must be shown by
competent evidence that such combination or conspiracy has, in
fact, resulted in restraints or will inevitably produce actual
restraints in the future. Full opportunity should be accorded the
parties to cross-examine and rebut all the evidence adduced on both
sides of the litigation. Such would be the requirements in any suit
under the Sherman Act against those who sell food, steel or
furniture, and no cogent reason is apparent for applying less
stringent requirements when dealing with the business of the press.
Indeed, the very nature of the newspaper business is a compelling
reason for a strict adherence to these requirements. Any possible
use of the Sherman Act as a ready vehicle for unjustified
governmental interference in the dissemination of news is thus
avoided by insistence upon these elemental standards of proof and
fairness of procedure. The actual and potential dangers in any such
interference greatly outweigh any public interest in destroying an
abandoned, ineffective or abortive scheme that appears at first
glance to restrain competition among newspapers.
Accordingly I am unable to agree that this case should be
disposed of in favor of the Government on a motion for summary
judgment. The issues are too grave, and the possible consequences
are too uncertain, not to require the Government to prove its case
by more probative and convincing evidence than it has submitted so
far. The admitted facts are either inconclusive or definitely lean
in favor of the contentions of the Associated Press. These admitted
facts, in my estimation, do not constitute such clear evidence of
an alleged restraint of trade as to justify the proposed
interference by the Government in the Associated Press membership
rules which underlie the distribution of Associated Press
dispatches. They do not justify the conclusion that the Associated
Press bylaws, on their face and without regard to their past
effect, will "necessarily" result in unlawful restraints. It may
well be that
Page 326 U. S. 54
these bylaws will restrain trade, and ought to be enjoined, but
I am unwilling to reach that conclusion without requiring the
parties and the court below to examine the facts more thoroughly,
having in mind the dangerous implications inherent in this
situation and the clarity of proof that the Government should
present.
III
The nub of the complaint against the Associated Press is that
its bylaws (1) allow discrimination in the condition of admission
based upon the factor of an applicant's competition with a present
member, and (2) enforce such discriminatory exclusion through a
non-trading agreement among members, an agreement which the court
below found to be reasonable when considered separately. In other
words, these bylaw provisions are said to constitute a combination
for the purpose of excluding competitors from that part of the
market within the scope of the agreement, and hence be an
unreasonable restraint of trade within the well settled meaning of
the Sherman Act.
It may be conceded that these bylaw provisions, on their face,
are restrictive in nature, and that their natural effect is to
exclude outside newspapers from the benefits of Associated Press
membership. But that concession does not prove that these
provisions are necessarily so unreasonable in nature as to be a
restraint of the type clearly condemned by the Act. They may be
regarded on this record as nothing more than the exercise of a
trader's right arbitrarily to choose his own associates and to
protect the fruits of his own enterprise from use by competitors.
United States v. Colgate & Co., 250 U.
S. 300,
250 U. S. 307;
International News Service v. Associated Press,
248 U. S. 215,
248 U. S. 235.
Any frustration of competition that might result from such an
exercise is a normal incident of trade in a competitive economy, a
lawful objective of business enterprise. Certainly the Sherman Act
was not designed to discourage men from
Page 326 U. S. 55
combining their talents and resources in order to outdo their
rivals by producing better goods and services. It was meant to
foster, rather than to thwart or punish, successful competition.
Competitive practices emerge as unreasonable restraints of trade
only if they are infused with an additional element of unfairness,
such as monopoly, domination, coercion, price-fixing, or an
unreasonable stifling of competition. If there is such a factor in
this instance, however, it lies deep in the unfathomed sea of
conflicting or unproved facts.
If it were true that the Associated Press monopolizes or
dominates the newspaper field, these bylaw provisions might be
found to be unreasonable restraints of trade. Then the unfairness
of excluding outside newspapers because of their competition would
be manifest.
See United States v. Terminal Railroad Ass'n,
224 U. S. 383. But
the Government makes no such claim. In fact, the District Court
specifically found no evidence of monopoly or domination by the
Associated Press in the collection or distribution of news, the
means of transmitting the news, or the access to the original
sources of the news. A brisk rivalry with the United Press and the
International News Service is recognized in these matters.
Associated Press thus has no power, through the use of its bylaws
or because of its size, to exclude nonmembers from receiving or
obtaining news reports. In this respect, there is no basis for
concluding that the bylaws will "necessarily" restrain trade.
A point is made of the fact, however, that the Associated Press
is the largest of the news agencies, ranking "in the forefront in
public reputation and esteem" and constituting "the chief single
source of news for the American press, universally agreed to be of
great importance." A unique value is said to attach to Associated
Press news reports, growing out of the fact that they are furnished
by an agency composed of and controlled by newspapers representing
nearly every shade of opinion and geographical
Page 326 U. S. 56
section of the nation. These characteristics are claimed to
furnish an invaluable guaranty that the news will be presented by
Associated Press with a minimum of political and sectional bias.
The great size and extent of the Associated Press facilities are
also purported to lend a uniqueness to its reports.
But there is no evidence in the present state of the record that
these factors, if they exist, make the Associated Press reports so
superior to those of its rival agencies as to clothe Associated
Press reports in the robes of indispensability, or that competition
by nonmembers is hindered or restrained unnecessarily. Perhaps the
Government has evidence to that effect which should be introduced.
In the absence of such evidence, however, neither the policy nor
the language of the Sherman Act penalizes those who, by their
enterprise and sagacity, have formed a news service of the first
rank and of unique value in the eyes of a considerable portion of
the public. A cooperative organization, untinged with any
monopolistic or other objectionable hue, is free to exceed its
competitors in size and excellence without losing its right to
choose its members and to protect its own unique products from the
use of others.
If it were shown that the Associated Press, through its bylaws,
has stifled or is inevitably bound to stifle competition by
nonmember newspapers in an unreasonable manner, so as to injure the
public interest, a violation of the Sherman Act would be beyond
dispute. This appears to be the primary basis for the result
reached by the Court today, for it states that inability to buy
news from the Associated Press "can have" most serious effects on
competing newspapers, and that they are "more than likely" to be at
a competitive disadvantage. But even if competitive disadvantage,
under some circumstances, is sufficient to prove an unreasonable
stifling of competition, the Government has, as yet, produced no
evidence to support the existence or the likelihood of such a
disadvantage.
Page 326 U. S. 57
On the contrary, the evidence submitted by the Associated Press
and accepted as true by the District Court demonstrates that many
newspapers have flourished without Associated Press service and
have successfully competed with Associated Press members. These
proofs also indicate that numerous papers actually prefer the
services of other news agencies to that of Associated Press;
several of them having actually dropped their Associated Press
membership and become members of one of the other news
associations. Moreover, there is a complete lack of any relevant
proof justifying the conclusion that the Associated Press
membership policy has prevented or hindered the birth of a
competing newspaper, prevented or hindered the successful operation
of one, or caused one to be discontinued.
Nor does it appear from the record that any appreciable segment
of the public has been unduly deprived of access to world news
through inability to read Associated Press dispatches in nonmember
newspapers. Indeed, the very presence of Associated Press
newspapers in cities where there are competing nonmembers would
seem to assure the public of Associated Press news at a small cost.
The widespread service of the Associated Press, covering both towns
with and without competing services, is to that extent a guarantee
of adequate access to its dispatches.
It is conceivable, of course, that these bylaws "can have"
adverse effects upon competition and upon the public. But something
more than a bare possibility should be required before we are
justified in sanctioning interference by the Government with the
private dissemination of information. There should be clear proof
here not only of a competitive advantage, but also of some unfair
use of any competitive advantage that the Associated Press may
possess, or proof that it is acting so as to stifle competition
unreasonably. Evidence of this nature, moreover, unless it is
undisputed, should be thoroughly tested in the crucible
Page 326 U. S. 58
of cross examination and counter evidence. An issue of this
nature deserves more than a summary disposition.
Thus, if it were shown that the Associated Press was using its
bylaws to fix prices for news reports or to coerce nonmember
newspapers in some way, a clear violation of the Sherman Act would
be proved. Under certain circumstances, these bylaws conceivably
might be employed for the purpose of coercing the nonmembers to
join the Associated Press, to refrain from obtaining news from
other sources or to cease operations. But no attempt has been made
by the Government to allege or prove such facts, and their
existence cannot be assumed any more than we can presuppose unfair
destruction of competition in order to justify the decree of the
court below.
At the same time, however, most of the cases cited in support of
the result reached by the Court today are relevant only to a
situation where there is some element of coercion or unfairness
present. Thus, the combination in
Montague & Co. v.
Lowry, 193 U. S. 38, was
designed to force nonmembers to join as the price of being able "to
transact their business as they had theretofore done." In
Standard Sanitary Mfg. Co. v. United States, 226 U. S.
20, a combination was formed to prohibit sales to
nonmember jobbers, thereby tending to force them to join. In
Eastern States Retail Lumber Dealers' Ass'n v. United
States, 234 U. S. 600,
retailers combined and refused to buy from wholesalers who sold
directly to consumers, as a result of which the wholesalers were
compelled to cease selling at retail. The combination in
Fashion Originators' Guild, Inc. v. Federal Trade
Commission, 312 U. S. 457,
organized a boycott against those who refused to comply with its
program, thus narrowing the market and forcing them to cease
pirating designs. Finally, the combination in
United States v.
Crescent Amusement Co., 323 U. S. 173,
used its buying power to eliminate competition with exhibitors and
to acquire a monopoly in the areas in question.
Page 326 U. S. 59
There is thus no direct or authoritative precedent guiding our
decision in this case. None of the foregoing cases or any other
that could be cited justifies us in sanctioning the application of
the Sherman Act on an unproved assumption that a particular
combination will "necessarily" and illegally restrain competition
in the face of overwhelming evidence to the contrary. Nor are any
of these cases authority for deciding a Sherman Act case on a
motion for summary judgment where serious doubts exist as to the
alleged unreasonableness of the restraint of trade. No case,
moreover, bids us to sanction an application of the Sherman Act to
the business of gathering and distributing news with our eyes
closed to the inevitable implications and hazards.
We stand at the threshold of a previously unopened door. We
should pause long before opening it, lest the path be made clear
for dangerous governmental interference in the future. A decree of
the type present in this case is not of necessity an undue
interference by the Government. If it were supported by facts, it
would be a reasonable and justifiable method of liberating
nonmember newspapers from the alleged coercive yoke of the
Associated Press and of assuring the public of full access to the
news of the world. But the danger lies in approving such a decree
without insisting upon more proof than yet produced by the
Government. If unsupported assumptions and conjectures as to the
public interest and competition among newspapers are to warrant a
relatively mild decree such as this one, they will also sustain
unjust and more drastic measures. The blueprint will then have been
drawn for the use of the despot of tomorrow.
Since I am of the opinion that the judgment should be reversed
and the cause remanded to the District Court for further
consideration in light of the principles I have mentioned, I do not
deem it necessary to comment in detail on the other parts of the
decree discussed by the Court.
Page 326 U. S. 60
At the same time, however, it seems only fair to state that, on
the facts presented, it is difficult to see any justification for
the agreement whereby Associated Press is given the exclusive right
to Canadian Press news reports in the United States. Associated
Press is thereby given an outright monopoly of the only available
comprehensive news coverage of a great nation, no comparable
substitute being available. The only other matter remaining in
doubt is the bylaw restriction which prevents the Associated Press
members from making their spontaneous local news available to
nonmembers and to rival news agencies. The lower court appears to
have thought this provision reasonable when considered apart from
the membership restriction. On the present state of the record, I
am not prepared to disagree, although I am inclined to believe that
this provision may well be shown to be unreasonable.