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94-6190 IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT UNITED STATES OF AMERICA, Plaintiff-Appellant, ve EASTMAN KODAK CO., a corporation of New Jersey, and EASTMAN KODAK CO., a corporation of New York, Defendants-Appellees. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK BRIEF FOR THE UNITED STATES ANNE K. BINGAMAN ssistant Attorn: al DIANE P. WOOD Deputy Assistant Attorney General CATHERINE G. O'SULLIVAN ROBERT B. NICHOLSON ROBERT J. WIGGERS Attorneys Department of Justice Washington, D.C. 20530 TABLE OF CONTENTS PRELIMINARY STATEMENT ©. 6 6 es ee SUBJECT MATTER AND APPELLATE JURISDICTION ISSUES PRESENTED «+--+ ee ees STATEMENT 6 2 ee ee ee ee 1, ‘The Proceedings Below. . . . - 2. The 1921 and 1954 Decrees . . - 3. Kodak's Current Market Position al Filme ee eee b. Photofinishing. ... ++ 4. The District Court Decision . . a. The 1921 Decree... + - b. The 1954 Decree ..--- SUMMARY OF ARGUMENT ©... ee ee es THE DISTRICT COURT ERRED IN TERMINATING THE DECREES ON THE GROUND THAT KODAK LACKS MARKET POWER A. The District Court Misconstrued Applicable Precedent to Reduce Substantially the Burden Imposed on Defendants Seeking Termination of Antitrust Decrees... ++ B. The District Court's Findings and the Undisputed Evidence Show That Kodak Failed to Prove That It Lacks Market Power... + s+ C. Kodak’s Continuing Market Power In Film Also Compels A Reversal With Respect to the 1954 Decree se eee tet tt eee D. The District Court’s Decision Threatens Serious Damage to Effective Enforcement of the Antitrust Laws eee ee es CONCLUSION © 1 ee ee ee es Re) eo rol ns ee 10 12 12 12 15 28 30 33 TABLE OF AUTHORITIES Cases: al vy. Mutua: “Insurance, 784 F.2d 1325 (7th Cir. 1986) Board of Education v. Dowell, 4980.5. 237, 247 (1991). - - ee ee we i d_ Par ct ca, Inc., 651 F.2d 122 (20 Cir. 1981) 0-0 eee ee ee ee chnica. ice 7 e ‘Inc., 112 8. Ct. 2072 (1992) -- +e +e ee ite! Non? arene Mees. 2 (i384). caenenene ee te ‘of Oklahoma, 468 U.S. 85 (1984) ~~ - state iation for Retarded C} “Ine. v, Carey, 706 F.2d 956 (2d Cir.), Gert. denied, 464 U.S. 915 (1983)... ~ Patterson v. Newspaper & Mail Deliverers’ ‘Union, 13 F.3d 33 (2d Cir. 1993) .. ~~ hart 2; fat il, 112 8. Ct. 748 (1992). 2 ee ee ee ew York _v. =I coy 811 F. Supp. 648 (E.D.N.¥. 1993) -- +--+ ME etrie dnc., 7 F.3d 986 (11th Gir. 1993), sert.denied, T14°S. Ct. 2710 (1994) 2. ee ee ee tes. i sr Tse F-R-D. 67 (D. Vi. 1998) oe ni sv. du Pont 01 366 U.S. 316 (1961)- +--+ eee ste United States v. Fastman Kodak Co., 230 Fed. 522 (1916), appeal dismissed, 255 U.S. 578 (1921)... + ai Page ee 33 8, 10, 13-15 8, 10, 13, 14 Po 8,