The Department of Justice announced today that they are reexamining the Paramount Decision, a landmark antitrust case from 1948 that resulted in Hollywood studios losing exclusivity rights on which theatres showed their films.
Before 1948, many major studios also owned their own theaters, creating a monopoly on which films could be shown where. In addition to this, the studios held exclusive contracts with the writers, directors and actors who made their films, as well as the processing labs which developed the films. As a result, the government sued the “Big Five,” (Paramount, MGM, Warner Bros., 20th Century Fox and RKO Pictures), arguing that industry competition had been reduced due to the companies being vertically integrated. The case eventually reached the U.S. Supreme Court, which voted against the studios and required that they pull out from all theater ownership.
The DOJ’s announcement comes in the wake of the department’s review of historic antitrust cases. It cited that the film industry and theater industry have changed since the initial ruling, and that these changes could possibly make the Paramount regulations too stringent.
We discuss today’s announcement and the implications it may have on future Hollywood productions.
Jason E. Squire, editor of “The Movie Business Book” (Routledge, 2016); professor of cinema practice at USC