U.S. Ends Longstanding Restraints Against Kodak

After a 2 1/2-year battle with the federal government, Eastman Kodak Co. is finally free of decades-old legal shackles designed to keep it from monopolizing the U.S. photographic market.

The Justice Department said Tuesday that it will not seek a Supreme Court appeal of a federal ruling that set aside 1921 and 1954 consent decrees aimed at restraining Kodak’s marketing practices.

The 1921 order prohibited Kodak from making “private label” film that carries brand names other than its own, while the 1954 order barred the company from including photofinishing costs in film prices.

“We’re, of course, gratified with the Justice Department’s decision,” Kodak spokesman Charles Smith said. “It provides Kodak with the flexibility to be more competitive on a global basis.”

Arguing that the decrees inhibited its ability to compete worldwide, Kodak went to court here in May, 1993, to get them overturned. The Justice Department countered that Kodak’s 70% U.S. market share gives the company power to dominate, and its witnesses included Kodak rival Fuji.

U.S. District Judge Michael A. Telesca agreed with Kodak, vacating the decrees in May, 1994. His decision was upheld by the U.S. 2nd Circuit Court of Appeals in New York on Aug. 4.

The Justice Department had been expected to ask the nation’s highest court to hear the case. It gave no reason why it decided not to proceed.

The orders had been designed to strip away Kodak’s monopoly in the United States. But Kodak’s dominance of U.S. film sales has been eroded by Fuji and private-label film makers in the last decade and it can no longer rely on double-digit growth.