United States v. United Shoe Machinery Corp.

110 F. Supp. 295 (D. Mass. 1953)

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Nature of the Case

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Facts

D manufacturers all the principal types of machines used in all the major processes of shoemaking. It distributes the more important types only through leases. These leases have many 'partnership' features which go beyond assuring D prompt, periodic payment of rent. Through these leases, D maintains a network of contacts, with approximately 90% of all shoe factories. It supplies more than 75% and more probably 85% of the demand for shoe machinery (excluding dry thread sewing machinery). P charged D with monopolizing all of the 'interstate trade and commerce in the shoe machinery industry. P obtained market dominance through patents, high-quality machinery prompt repair services, and personal working relationships with shoe manufacturers. D invested heavily in improvements for its machines. It also offered a one-stop solution to manufacturers who needed to purchase many different types of machines in order to produce shoes. D leased its major machines for 10 years with 5 year almost automatic renewals. D rolled with the punches in each marketplace and suffered low margins where there was competition and much higher margins when there was no competition. P claimed D used unlawful methods to obtain its monopoly, that D excluded competition from marketing policies not based on free competition. D denied the allegations and claimed it obtained market share lawfully and had not abused its position to exclude competition.