Syllabus.

AMERICAN TOBACCO CO. ET AL. v. UNITED STATES.

NO. 18. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT."

Argued November 7, 8, 1945.-Decided June 10, 1946.

1. When there is a combination or conspiracy to control and dominate interstate trade and commerce in a commodity, coupled with the power and intent to exclude competitors to a substantial extent, the crime of monopolization under § 2 of the Sherman Anti-Trust Act is complete; and the actual exclusion of competitors is not necessary to the crime. Pp. 784-787, 798, 808-815.

2. To support a conviction for conspiring to monopolize certain trade in violation of the Sherman Act, it is not necessary to show power and intent to exclude all competitors, nor to show a conspiracy to exclude all competitors. P. 789.

3. Under § 2 of the Sherman Act, it is the crime of monopolizing for parties to combine or conspire to acquire or maintain the power to exclude competitors from any part of the trade or commerce among the several States or with foreign nations, provided (a) they also have such a power that they are able, as a group, to exclude actual or potential competition from the field and (b) they have the intent and purpose to exercise that power. P. 809.

4. It is not the form of the combination or the particular means used but the result to be achieved that the statute condemns. P. 809. 5. It is not important whether the means used to accomplish the unlawful objective are in themselves lawful or unlawful. P. 809. 6. No formal agreement is necessary to constitute an unlawful conspiracy. P. 809.

7. The essential combination or conspiracy in violation of the Sherman Act may be found in a course of dealing or other circumstances as well as in an exchange of words. Pp. 809, 810.

8. Neither proof of exertion of the power to exclude nor proof of actual exclusion of existing or potential competitors is essential to sustain a charge of monopolization under the Sherman Act. P. 810.

*Together with No. 19, Liggett & Myers Tobacco Co. et al. v. United States, and No. 20, R. J. Reynolds Tobacco Co. et al. v. United States, on certiorari to the same court, argued and decided on the same dates.

9. A combination may be one in restraint of interstate trade or commerce or to monopolize a part of such trade or commerce in violation of the Sherman Act, although such restraint or monopoly may not have been actually attained to any harmful extent. P. 811. 10. The material consideration in determining whether a monopoly exists is not that prices are raised and that competition actually is excluded but that power exists to raise prices or to exclude competition when it is desired to do so. P. 811.

11. United States v. Aluminum Co. of America, 148 F. 2d 416, approved. Pp. 811-814.

12. Separate convictions for a conspiracy to restrain trade and for a conspiracy to monopolize trade do not amount to double jeopardy or to a multiplicity of punishment in a single proceeding contrary to the Fifth Amendment, since they are separate statutory offenses, one being made criminal by § 1 and the other by § 2 of the Sherman Act. Braverman v. United States, 317 U. S. 49, distinguished. Pp. 787, 788.

13. Separate convictions for monopolization and for conspiring to monopolize in violation of the Sherman Act do not result in multiple punishment contrary to the Fifth Amendment, since they are separate offenses. United States v. Rabinowich, 238 U. S. 78; Pinkerton v. United States, 328 U. S. 640. Pp. 788, 789.

147 F. 2d 93, affirmed.

Petitioners were convicted of violating §§ 1 and 2 of the Sherman Anti-Trust Act. The Circuit Court of Appeals affirmed. 147 F. 2d 93. This Court granted certiorari "limited to the question whether actual exclusion of competitors is necessary to the crime of monopolization under § 2 of the Sherman Act." 324 U. S. 836. A petition for rehearing and enlargement of the scope of review in No. 20 was denied. 324 U. S. 891. Affirmed, p. 815.

George W. Whiteside and Milton Handler argued the cause for petitioners in No. 18. With them on the brief was John A. V. Murphy.

Bethuel M. Webster argued the cause for petitioners in No. 19. With him on the brief was Francis H. Horan.

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Opinion of the Court.

Harold F. McGuire argued the cause for petitioners in No. 20. With him on the brief were B. S. Womble, Thomas Turner Cooke and Richard C. Stoll.

Assistant Attorney General Berge argued the cause for the United States. With him on the brief were Solicitor General McGrath, Charles H. Weston and Robert L. Stern.

MR. JUSTICE BURTON delivered the opinion of the Court.

The petitioners are The American Tobacco Company, Liggett & Myers Tobacco Company, R. J. Reynolds Tobacco Company,' American Suppliers, Inc., a subsidiary of American, and certain officials of the respective companies who were convicted by a jury, in the District Court of the United States for the Eastern District of Kentucky, of violating §§ 1 and 2 of the Sherman Anti-Trust Act, pursuant to an information filed July 24, 1940, and modified October 31, 1940.

Each petitioner was convicted on four counts: (1) conspiracy in restraint of trade, (2) monopolization, (3) attempt to monopolize, and (4) conspiracy to monopolize. Each count related to interstate and foreign trade and commerce in tobacco. No sentence was imposed under the third count as the Court held that that count was merged in the second. Each petitioner was fined $5,000 on each of the other counts, making $15,000 for each petitioner and a total of $255,000. Seven other defendants were found not guilty and a number of the original defendants were severed from the proceedings pursuant to stipulation.

The Circuit Court of Appeals for the Sixth Circuit, on December 8, 1944, affirmed each conviction. 147 F. 2d

1 Here referred to as American, Liggett and Reynolds.

Opinion of the Court.

328 U.S.

93. All the grounds urged for review of those judgments were considered here on petitions for certiorari. On March 26, 1945, this Court granted the petitions but each was "limited to the question whether actual exclusion of competitors is necessary to the crime of monopolization under § 2 of the Sherman Act." 324 U. S. 836. On April 19, 1945, Reynolds, et al., filed a petition for rehearing and enlargement of the scope of review in their case but it was denied. 324 U. S. 891. This opinion is limited to the convictions under § 2 of the Sherman Act 2 and deals especially with those for monopolization under the second count of the information.

2

The issue thus emphasized in the order allowing certiorari and primarily argued by the parties has not been previously decided by this Court. It is raised by the following instructions which were especially applicable to the second count but were related also to the other counts under § 2 of the Sherman Act:

3

"Now, the term 'monopolize' as used in Section 2 of the Sherman Act, as well as in the last three counts

2 "SEC. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court." 26 Stat. 209, 15 U. S. C. § 2.

3 The second count included particularly the following:

"Before and during the period of three years next preceding the filing of this information, . . . defendants, . . . well knowing the foregoing facts, have, . . . unlawfully monopolized the aforesaid interstate and foreign trade and commerce in tobacco, in violation of Section Two of the Act of Congress of July 2, 1890, . . .

"In adopting and exercising such methods, means and practices, each defendant has acted with full knowledge that unanimity

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Opinion of the Court.

of the Information, means the joint acquisition or maintenance by the members of a conspiracy formed for that purpose, of the power to control and dominate interstate trade and commerce in a commodity to such an extent that they are able, as a group, to exclude actual or potential competitors from the field, accompanied with the intention and purpose to exercise such power.

"The phrase 'attempt to monopolize' means the employment of methods, means and practices which would, if successful, accomplish monopolization, and which, though falling short, nevertheless approach so close as to create a dangerous probability of it, which methods, means and practices are so employed by the members of and pursuant to a combination or conspiracy formed for the purpose of such accomplishment.

"It is in no respect a violation of the law that a number of individuals or corporations, each acting for himself or itself, may own or control a large part, or even all of a particular commodity, or all the business in a particular commodity.

"An essential element of the illegal monopoly or monopolization charged in this case is the existence

of action with reference thereto was and would be the policy, intent and practice of the others, that such unanimity of action would necessarily result in drawing to defendant major tobacco companies as a group the power to dominate, control, and exclude others from the aforesaid interstate and foreign trade and commerce, has intended such result, and such result has in fact been achieved.

"Said unlawful monopolization has had the effects, among others, of permitting a few companies to attain control of a bottleneck in a great industry, through which a major farm commodity, on which several million are dependent, must pass, on its way through the hands of jobbers and retailers, to the many millions of people who use tobacco products; of enabling these few companies to abuse their resulting strategic and dominant position, by making the income of growers of leaf tobacco lower than it otherwise would have been; by making the income of distributors and other manufacturers of tobacco products lower than it otherwise would have been; and by keeping from all other groups in the industry, and from consumers, the benefits which otherwise would flow from free, vigorous and normal competition."