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SUGAR INSTITUTE, INC. V. UNITED STATES, 297 U. S. 553 (1936)
U.S. Supreme Court
Sugar Institute, Inc. v. United States, 297 U.S. 553 (1936)
Sugar Institute, Inc. v. United States
Argued February 3, 4, 1936
Decided March 30, 1936
297 U.S. 553
1. The restrictions of the Sherman Anti-Trust Act are aimed against such restraints of interstate commerce as are unreasonable. P. 297 U. S. 597.
2. The Act does not forbid cooperative adoption by competitors of reasonable means to protect their trade from injurious practices and to promote competition on a sound basis, and such legitimate cooperation is not limited to the removal of evils which are in themselves infractions of positive law. P. 297 U. S. 598.
3. The mere fact that correction of abuses in a business by cooperative action of those competing in it may tend to stabilize the business, or to produce fairer price levels, does not stamp their action as unreasonable restraint of trade. P. 297 U. S. 598.
4. But concerted action which produces unreasonable restraint cannot be justified by pointing to evils affecting the industry or to a laudable purpose to remove them. P. 297 U. S. 599.
5. While the collection and dissemination of trade statistics are in themselves permissible, and may be a useful adjunct of fair commerce, a combination to gather and supply information as part of a plan to impose unwarrantable restrictions on competition, as, for example, to curtail production and raise prices, is unlawful. P. 297 U. S. 599.
6. In applying the Sherman Act, each case demands a close scrutiny of its own facts, and questions of reasonableness are necessarily questions of relation and degree. P. 297 U. S. 600.
7. Fifteen companies, which refined nearly all of the imported raw cane sugar processed in this country and supplied from 70 to 80% of the refined sugar consumed in it, formed a trade association, called The Sugar Institute, ostensibly for the purpose of doing away with unfair merchandizing practices, especially the granting of secret concessions and rebates to customers, which had grown up in the trade. They agreed that all discriminations between customers should be abolished, and, to that end, that each company should publicly announce in advance its prices, terms, and conditions of sale and adhere to them strictly until it publicly changed them. They also agreed upon a number of supplementary restrictions (which are considered in detail in this opinion), among which were
(a) restrictions on the employment of brokers and warehousemen (infra, 297 U. S. 587); (b) restrictions concerning transportation, absorption of freight charges, etc. (infra, 297 U. S. 589); (e) limitation of the number of consignment points at which sugar was placed for distribution to surrounding areas and limitation of ports of entry to be used (infra, 297 U. S. 591); (d) prohibition of long-term contracts and restriction of quantity discounts on sales to customers (infra, 297 U. S. 593); (e) withholding from the purchasing trade of part of the statistical information collected by the Institute for its members and not otherwise available (infra, 297 U. S. 596). Owing to the position of these refiners in the sugar industry, maintenance of competition between them was a matter of serious public concern, and, since refined sugar is a highly standardized product, that competition must relate mainly to prices, terms, and conditions of sales. The strong tendency toward uniformity of price resulting from the uniformity of the commodity made it the more important that such opportunities as existed for fair competition should not be impaired.
(1) The agreement and supporting requirements went beyond the removal of admitted abuses and imposed unreasonable restraints. P. 297 U. S. 601.
(2) The vice of the agreement was not in the mere open announcement in advance of prices and terms -- a custom previously existing which had grown out of the special character of the industry and did not restrain competition -- nor in the relaying of such announcements, but in the steps taken to secure undeviating adherence to the prices and terms announced, whereby opportunities for variation in the course of competition, however fair and appropriate, were cut off. P. 297 U. S. 601.
(3) In ending the restraint, the beneficial and curative agency of publicity should not be unnecessarily hampered; publicity of prices and terms should not be confined to closed transactions; if the requirement that there must be adherence to prices and terms openly announced in advance be abrogated and the restraints which followed that requirement be removed, the just interests of competition will be safeguarded, and the trade will still be left with whatever advantage may be incidental to its established practice. P. 297 U. S. 601.
(4) The refiners should be enjoined from gathering and disseminating among themselves exclusively statistical information which is not readily, fully, and fairly available to the purchasing and distributing trade, and in which that trade has a legitimate interest,
but the command should not be so broad as to include information in relation to the affairs of refiners which may rightly be treated as having a confidential character and in which distributors and purchasers have no proper interest. P.___.
15 F.Supp. 817 modified and affirmed.
Appeal from a decree of injunction in a suit by the Government under the Anti-Trust Act. The bill named as defendants an incorporated trade association called The Sugar Institute, the fifteen sugar refining corporations composing it, and various individuals. The decree below did not dissolve the Institute, as was prayed, but permanently enjoined the defendants from engaging in forty-five stated activities found to be in restraint of competition in the sugar trade.
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