## Facts

- Grinnell Corporation controlled three affiliated central-station fire and burglar alarm companies, including American District Telegraph Co. (ADT).
- The affiliates provided “insurance company accredited” central-station protective services using automatic alarm systems connected to continuously staffed central stations with response arrangements.
- Grinnell and the affiliates obtained 87% of the national market for accredited central-station protective service; ADT alone held 73%.
- The firms engaged in market allocation agreements, discriminatory pricing practices aimed at limiting competition, and acquisitions of competitors.
- The United States brought a civil action alleging violations of §§ 1 and 2 of the Sherman Act; the district court found liability, defined the product market as accredited central-station service and the geographic market as national, and ordered broad injunctive relief including divestiture.
- The parties directly appealed to the Supreme Court, challenging both liability findings and aspects of the decree.

## Issues

1. Whether “insurance company accredited central station protective service” constituted a relevant product market, and whether the relevant geographic market was national.
2. Whether defendants possessed monopoly power in the relevant market and willfully acquired or maintained that power, in violation of Sherman Act § 2.
3. Whether defendants’ agreements and practices constituted unreasonable restraints of trade under Sherman Act § 1.
4. Whether the district court’s remedies, including divestiture and related injunction provisions, were appropriate and properly limited to curing the antitrust violations.

## Decision

- The Court affirmed the district court’s definition of the relevant product market as accredited central-station service and upheld the geographic market as national.
- The Court held that monopoly power could be inferred from defendants’ predominant market share and found defendants possessed monopoly power given their 87% share.
- The Court affirmed § 2 liability, concluding the monopoly was willfully acquired or maintained through exclusionary conduct rather than through superior product, business skill, or chance.
- The Court affirmed the § 1 violations based on the anticompetitive agreements and practices.
- The Court largely approved divestiture and other relief aimed at dissolving the combination and removing monopoly power, while modifying certain remedial details to limit unnecessary supervisory intrusion.

## Legal Principles

- Sherman Act § 2 monopolization requires: (1) possession of monopoly power in the relevant market and (2) willful acquisition or maintenance of that power, as distinct from lawful success due to a superior product, business skill, or historic accident.
- Monopoly power may be inferred from a predominant share of the relevant market, particularly where the share is overwhelming and durable.
- A relevant market may consist of a “cluster of services” when commercial reality treats the services as a single offering; accredited and nonaccredited services may be distinct markets when they differ in requirements and demand.
- The geographic market may be national where pricing and competitive policies are set on a nationwide basis.
- Divestiture is a preferred remedy for proven monopolization because it directly breaks up the combination and restores competitive conditions, though relief should be limited to what is necessary to cure the violations.

## Conclusion

The Supreme Court upheld findings that Grinnell and its affiliates monopolized the national market for insurance-accredited central-station protective services, inferring monopoly power from an 87% market share and concluding that exclusionary practices willfully maintained that power; it approved divestiture and related injunctive relief with limited modifications.


United States v. Grinnell Corp., 384 U.S. 563 (1966)