US Takes Pruning Shears to 70-Year-Old Film Settlements

MANHATTAN (CN) – Antitrust decrees that have dictated the U.S. film industry since 1949 might soon hit the cutting-room floor.

“The Paramount Decrees have been on the books with no sunset provisions since 1949,” Assistant Attorney General Makan Delrahim said in a statement Thursday, announcing an initiative to review settlement papers that for nearly eight decades have regulated the way film studios distribute movies to theaters.

“Much has changed in the motion picture industry since that time,” Delrahim added. “It is high time that these and other legacy judgments are examined to determine whether they still serve to protect competition.”

The Justice Department inked the Paramount Consent Decrees after alleging in 1938 that the control exerted over film distribution and exhibition by the seven major film studios in the U.S. violated the Sherman Antitrust Act.

With the 1948 Supreme Court decision in U.S. v. Paramount, the government ultimately opened up the market for independent film producers and protected competition in the film industry.

That same goal is in mind, the Justice Department said Thursday, in its new plan to determine whether the consent decrees are still applicable or could use updates.

Revealing that it will discard any provisions that no longer serve their original purpose, the government cited the vast changes over the past eight decades in the way people watch movies.

Unlike in 1949, most metropolitan areas now have more than one movie theater, and many theaters show more than one movie at a time. People also now stream movies from home and watch films on television.

When the government first opened up its case, the studios — Paramount, Universal, MGM, Twentieth Century Fox, Warner Bros., Columbia and RKO — owned their own theater chains and forced independent theaters to sign contracts agreeing to show a certain number of their films, called “block booking.”

The consent decrees meant the studios gave up block booking and divested the theaters they owned. The decrees also banned other practices, like setting minimum prices on movie tickets and issuing sweeping theater licenses.

So far, the DOJ’s initiative is only a review process, to “determine whether the decrees should be modified or terminated,” according to the Department of Justice press release. It has opened a public-comment period so film producers and other interested parties can weigh in, it said.

“Do the Paramount Decrees continue to serve important competitive purposes today? Why or why not?” says one prompt for public comments.

“Have changes to the motion picture industry since the 1940s, including but not limited to, digital production and distribution, multiplex theatres, new distribution and movie viewing platforms render any of the Consent Decree provisions unnecessary?” says another.

A representative for Paramount Pictures did not immediately return a request for comment Thursday.

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