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Washington Law Review

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Abstract

The Justice Department brought injunctive action under section 4 of the Sherman Act against Grinnell Corporation and three affiliates which Grinnell controlled through preponderant stock ownership. Grinnell manufactures automatic sprinklers, fire and burglar alarms, and other machinery used in the alarm industry, and its affiliates are corporations supplying subscriber-customers with fire and burglar alarm services from central points through automatic alarm systems installed on subscribers' premises. Defendants had acquired an 87 per cent share of the accredited national Central Station Protective Service (CSPS) market, attained through pre-affilation market allocation agreements between the affiliate corporations and their competitors, discriminatory manipulation of prices to forestall competition in violation of Sherman Act section 1, and acquisition and dismantlement of competing companies. Grinnell, in acquiring the preponderance of stock in the affiliate corporations and directing the policy of the four corporations toward monopolization, violated section 2.1 Held: Where the Government has borne the burden of defining the relevant market and proving that defendant occupies an overwhelming share of that market, a presumption arises that defendants have monopoly power and have exercised that power in violation of section 2 of the Sherman Act; this presumption may be rebutted only by defendants' proving either that monopoly power does not in fact exist, or that their dominance is the result of superior skill, efficiency, foresight, or other legal means. United States v. Grinnell Corp., 236 F. Supp. 244 (D.R.I. 1964), prob. juris. noted, 85 S.CT. 1538 (1965) (Nos. 1081-86, 1964 Term; renumbered Nos. 73-77, 1965 Term).

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