International Telephone and Telegraph Corporation v. General Telephone & Electronics Corporation and Hawaiian Telephone Company

General Telephone & Electronics Corporation and Hawaiian Telephone Company, defendants, appeal a district court judgment ordering massive divestiture of subsidiary companies in a private antitrust action brought in 1967 by International Telephone and Telegraph Corporation. The judgment is affirmed in part and reversed in part.

ITT alleged that numerous acquisitions by GTE, beginning in 1950, together with trade practices which followed those acquisitions, violated §§ 1 and 2 of the Sherman Act and § 7 of the Clayton Act.

As of 1969, GTE owned and controlled 33 telephone operating companies serving customers in several states. GTE also owned Automatic Electric Company, which in turn owned Lenkurt Co., Inc. Automatic Electric and Lenkurt manufacture telecommunications equipment.

The theory of ITT’s case was that' GTE’s acquisitions had enabled GTE to effect a growing foreclosure of competition within the telecommunications equipment-manufacturing industry. By satisfying the equipment demand of its operating subsidiaries from sales by its manufacturing subsidiaries, GTE allegedly reduced to an impermissible degree the potential sales opportunities of “independent” manufacturers,…