Going After G.E.

Until the waning days of 1961, it was possible to argue that under Attorney General Robert Kennedy the Justice Department was actually showing itself easier on business than it had in the days of Dwight Eisenhower: in the first year of the Kennedy Administration the Justice Department brought fewer antitrust suits than it did in the last year of the Eisenhower Administration. Then, in one action, the Kennedy trustbusters more than made up the difference by unlimbering a startling new concept of antitrust enforcement.

The new attack was launched in a Philadelphia federal court, where Justice Department lawyers asked for an order that would henceforth specifically forbid the General Electric Co. from fixing prices on any of its hundreds of products. The Justice Department request represented a sharp departure from previous practice under which such a court order would be confined only to the 18 items of electrical equipment on which G.E. was convicted of price fixing in last February's great conspiracy trial (TIME, Feb. 17 et seq.). If approved by the court, the new proposal would make G.E. liable for contempt of court if it were ever again convicted of price fixing in any field. From the Justice Department viewpoint, this would have twin advantages: 1 ) it would make all G.E. divisions, rather than just those already convicted, fearful of price fixing; and 2) since there are no statutory limits on contempt of court sentences as there are on penalties for antitrust violations, a judge could, if he chose, punish future price fixing by G.E. far more heavily than the antitrust laws call for.

G.E. lawyers were sure that peppery Lee Loevinger, chief of Justice's Antitrust Division, had initiated the new action in reprisal for G.E.'s refusal to sign a consent decree under which the company would bind itself not to charge "unreasonably low" prices that might tend to harm competitors. Another theory was that Loevinger was worried by the vagueness of the proposed consent decree, which might make it legally untenable.

The Justice Department had a different explanation. Pointing out that G.E. had been found guilty in 29 antitrust actions in the last 50 years, the trustbusters described the court order as the only way to frustrate "G.E.'s proclivity for persistent and frequent involvement in antitrust violations." The trustbusters also denied G.E.'s contention that the order would saddle the company with the burden of proving its innocence, argued instead that it would still be up to the Government to prove violations.

But even though G.E. on its own record might be vulnerable, the precedent that the Justice Department was seeking to establish is a perilous one.

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