## Facts

- The United States sued Syufy Enterprises and Raymond J. Syufy for civil antitrust violations in the Las Vegas, Nevada first-run motion picture exhibition market.
- In 1981, Syufy opened a new six-screen multiplex in Las Vegas that drew increased attendance and strong distributor demand for first-run licenses.
- A competitive bidding environment for first-run films developed, and Syufy’s principal first-run competitors (Mann and Plitt) exited and sold their theaters to Syufy between 1982 and 1984.
- In 1984, Syufy acquired Cragin Industries’ eleven-screen Redrock Theatre, after which Syufy owned all first-run theaters in Las Vegas.
- The government alleged Syufy unlawfully acquired and maintained monopoly power by buying competitors and creating an effective “structural barrier” to entry because competing against Syufy would be costly and risky.
- After extensive discovery and an 8.5-day bench trial, the district court found no competitive injury because there were no barriers to entry; others could and did enter; and Syufy lacked power to control prices or exclude competitors.
- Evidence showed that competitive pressure re-emerged after Syufy’s dominance; distributors and exhibitors had alternatives, including licensing decisions that strengthened rivals’ ability to show first-run films.

## Issues

1. Whether Syufy possessed monopoly power in the relevant market and willfully acquired or maintained that power through exclusionary conduct in violation of Sherman Act § 2.
2. Whether Syufy’s acquisitions of competitor theaters substantially lessened competition or tended to create a monopoly in violation of Clayton Act § 7.
3. Whether asserted “structural barriers” based on Syufy’s efficiency and competitive strength could substitute for proof of durable market power and meaningful barriers to entry.

## Decision

- The Ninth Circuit affirmed judgment for Syufy.
- The court upheld findings that the Las Vegas first-run market lacked significant barriers to entry and that actual entry occurred, defeating the claim of durable monopoly power.
- Because Syufy lacked power to control prices or exclude competition over time, the Sherman Act § 2 monopolization and attempted monopolization claims failed.
- For the same reasons, the government failed to prove the acquisitions were likely to substantially lessen competition or tend to create a durable monopoly under Clayton Act § 7.

## Legal Principles

- Monopoly power under Sherman Act § 2 requires durable power to control prices or exclude competition; high market share alone is insufficient if entry is feasible and occurs.
- Lawful success attributable to a superior product or business acumen is not unlawful monopolization absent exclusionary conduct that creates or maintains durable market power.
- Claims of anticompetitive acquisition under Clayton Act § 7 require a showing that the transaction is likely to substantially lessen competition or tend to create monopoly power in a meaningful, sustained way.
- Antitrust law protects competition rather than individual competitors; vigorous rivalry and efficiency are not, without more, actionable “barriers to entry.”

## Conclusion

The Ninth Circuit held that even if Syufy temporarily became the sole first-run exhibitor through acquisitions, the government did not establish durable monopoly power or a likely substantial lessening of competition because the market remained open to entry and competitors in fact entered, limiting Syufy’s ability to control prices or exclude rivals.


United States v. Syufy Enters., 903 F.2d 659 (9th Cir. 1990)