Film producers face antitrust suit

July 20, 1938: After a two-year investigation, the Justice Department filed an antitrust lawsuit against the major Hollywood studios in an effort to separate film production from exhibition.

The Times called the suit “one of the most important brought by the government in the past decade.”

“Requesting the court to take all steps necessary to break up the asserted monopoly, the government specifically applied for injunctions which would compel producers to dispose of their theater chains,” the newspaper said.

“The Justice Department asked for orders directing Paramount, Twentieth Century Fox and Warner Brothers to withdraw from the exhibition field and forcing Loew’s and RKO to abandon production activities.”

Ten years later, in U.S. vs. Paramount, the Supreme Court decided in favor of the government, and studios were forced to get rid of their theater chains.