The united shoe decision is worth nothing for at least two reasons. It provides an example of the kind of behavior that courts have taken as sufficient to condemn a monopoly position of under the Sherman act. Further, in giving his opinion, Judge Charles E, Wyzanski, Jr. provided a succinct summary of the development of the law under section 2. The united shoe machinery corporation was formed in 1899 by a merger that combined seven previously independent firms. The government challenged this merger under the Sherman act, but in a 1918 decision the Supreme Court declined to find a violation. From that point on, united shoe machinery dominated the U.S. market for machines used to manufacture shoes.
At the time of the 1953 case, shoe manufacture involved 18 separate processes. Although united shoe machinery faced some competition in the manufacture or machines for individual processes, it was the only company in the United States that marketed a complete line of machines. Many of the machines were protected by patents. United shoe machinery had 75 to 85 per cent of the U.S. shoe machinery market.
The major machines were leased to costumers but not sold. The leases ran for 10 years. Judget hand followed the rule of standard oil: monopoly obtained or maintained by normal methods of industrial development does not constitute a violation of the Sherman act. But the evidence upon which judge hand relied for a showing of intent to monopolize – Alcoa’s continual expansion of capacity in anticipation of demand – raises more questions than it settles. If such conduct is evidence of intent to exclude, few firms with a position of market power can avoid being found guilty under the antitrust laws. This standard – which was later endorsed by the Supreme Court – seems to reserve the lenient attitude toward dominant firms taken in U.S. steel.
