FTC v. Motion Picture Advertising Service Co., 344 U.S. 392 (1953), (the MPAS case)[1] was a 1953 decision of the United States Supreme Court in which the Court held that, where exclusive output contracts used by one company "and the three other major companies have foreclosed to competitors 75 percent of all available outlets for this business throughout the United States" the practice is "a device which has sewed up a market so tightly for the benefit of a few [that it] falls within the prohibitions of the Sherman Act, and is therefore an 'unfair method of competition' " under § 5 of the FTC Act.

[3] The FTC brought an administrative proceeding against Motion Picture Advertising Service, asserting that its extensive exclusive dealing arrangements (of duration of from one to five years) with motion picture theaters foreclosed others from dealing with those theaters, and was therefore an unfair method of competition in violation of § 5 of the FTC Act.

[4]) MPAS's business is to enter into contracts with sellers of goods and services to produce short advertising motion picture films (so-called trailer ads) which depict and describe commodities offered for sale by these companies and then screen the films in the theaters with which it has contracts.

have decided the case on its merits" and held that the challenged practice "was not unfair or unreasonable, but was rendered desirable and necessary by good-business acumen and ordinarily prudent management.

"[9] In a 7–2 decision written for the Court by Justice Douglas, the judgment of the Fifth Circuit was reversed and the order of the FTC was reinstated.

Here, the FTC found that MPAS's "exclusive contracts unreasonably restrain competition and tend to monopoly."

And, due to the exclusive contracts, respondent and the three other major companies have foreclosed to competitors 75 percent of all available outlets for this business throughout the United States.

It is, we think, plain from the Commission's findings that a device which has sewed up a market so tightly for the benefit of a few falls within the prohibitions of the Sherman Act, and is therefore an "unfair method of competition" within the meaning of § 5.

Moreover, the FTC has not shown to the Supreme Court "that the exclusive feature here should be considered the economic equivalent of that in" the Standard Stations case.

Finally, as for defining "the content of the prohibition of 'unfair methods of competition,' to be applied to widely diverse business practices," Congress did "not entrust[ it] to the Commission for ad hoc determination within the interstices of individualized records, but .

[16] In United States v. Philadelphia Nat'l Bank, 374 U.S. 321 (1963), the Court explained what it considered the holding in the MPAS case.

[24]The Court concluded: We hold that the Commission acted well within its authority in declaring the Brown franchise program unfair whether it was completely full blown or not."

U-Haul engaged in what was in substance an attempted price-fixing scheme and the complaint, based on a consent order between the FTC and Amerco,[26] sought damages on behalf of both Liu and a large class of persons who rented U-Haul vehicles for trips to and from Massachusetts during a specified period.

The managers did as their CEO instructed, but "the FTC made no findings as to the consequences of the direct or indirect attempts, concluding that the overtures were unlawful regardless of whether the parties reached and successfully implemented an agreement to collude on prices.

"[27] Because no federal law clearly provides for damages for an attempt or solicitation to fix prices, Liu sued under Mass.

An academic study of contractual and ownership forms of vertical integration of business organizations emphasized the Court's migration of the "collective even though not collusive foreclosure" theory from the Standard Stations requirements contract decision to the MPAS output contract decision.

According to that general test, restrictive agreements are banned whenever they are intended to have, or in fact have, a significant anticompetitive effect—this being measured in terms of price, output, or quality of goods.

Thus, in MPAS, it was essential to evaluate the effect of respondents' contracts in their whole business setting in order to determine whether they passed the Sherman Act test.

[30]Joseph J. Simons,[31] analyzes MPAS and Standard Stations as exemplifying a principle that in a proper antitrust analysis the only "significant fact is the existence of a contract creating anticompetitive effects," and that "it should make no difference whether one of the parties is a monopolist, whether two or more parties are on the same level of production, or whether neither is true."