United States v. Grinnell Corp.

384 U.S. 563 (1966)

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Nature of the Case

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Facts

D owns 76% of the stock of ADT, 89% of the stock of AFA, and 100% of the stock of Holmes. ADT provides both burglary and fire protection services; Holmes provides burglary services alone; AFA supplies only fire protection service. Each offers a central station service under which hazard-detecting devices installed on the protected premises automatically transmit an electric signal to a central station. Upon receipt of a signal, the central station dispatches guards to the protected premises and notifies the police or fire departments. These three companies control over 87% of the business for central station services. Alternatives existed for those who did not use D. Insurance companies gave lower rates to companies who used central station services. D could not set prices because of competition. P brought suit against D for violation of §2. The court made a determination that the relevant market was the national market for central station services, a submarket of the security business. D claims this should be limited to local areas and not national. The court held that no reasonable alternative existed for such services and that D had a monopoly. The court also found that D operated some offices at a loss to injure competition and hence violated §§ 1 and 2.