RCA Under Fire

Ever since 1930, when radio came of age, giant Radio Corporation of America (1957 sales: $1.18 billion) has been fencing with the Justice Department in a series of antitrust matches. RCA, leading the industry in research, has been nicked by several actions designed to break its dominance of the electronics field. Last week the Government thrust hard to end the contest once and for all.

In the Eisenhower Administration's biggest antitrust suit to date, a federal grand jury charged RCA with conspiring to restrain the manufacture, sale and distribution of radio, television, radar and other electronic apparatus, and of monopolizing radio patent licensing in the U.S. Said the Government: "By this criminal indictment, we seek to restore competition in this significant industry so that all competitors of RCA can compete with it at every level from the research laboratory to the sale of end products."

Package Deals. The four-count indictment, based on the Sherman Anti-Trust Act, charges that RCA made agreements with General Electric, Westinghouse and

American Telephone & Telegraph Co. (all named as coconspirators, but not as defendants) to license their patents as well as its own, has thus won control of more than 10,000 patents that netted it 77% of all patent royalties paid by the radio-television industry in 1953. When another company wanted a patent to manufacture an electronic device, the charge continued, RCA insisted that it buy a "package" of patents that might include thousands of patents not needed or wanted.

The Government also charged that RCA made cartel agreements with such foreign firms as Holland's Philips Lamp Works, West Germany's Telefunken and Great Britain's Electric & Musical Industries Ltd. (all named as coconspirators) not to license for manufacture or export their products into each other's sales territories, thus denied U.S. consumers the opportunity to buy competitive foreign radio apparatus.

In 1954 the Government filed a civil suit against RCA containing many of the same charges. RCA has been negotiating with the Government on the suit (which is still pending), was caught by surprise by the new charges. The trustbusters switched to the broader criminal indictment because RCA has "persisted" in "willful antitrust violations," want to teach it a lesson it will not forget.

Look at the Facts. Previous efforts to convict RCA have had little luck, and a grand jury investigation of RCA affairs was quashed in 1952 by Democratic Attorney General James P. McGranery. But Republican Attorney General William Rogers' decision to go after RCA with a criminal indictment was undoubtedly encouraged by RCA's $10 million out-of-court settlement with Zenith, when it got a look at the facts Zenith had collected to support its charges of monopoly.

In Manhattan, an RCA spokesman said that the corporation has for years "licensed all comers ... in order that companies in the industry might compete more vigorously and more effectively with each other and with RCA."

This file is automatically generated by a robot program, so reader's discretion is required.