In the case of Milgram v Loew’s of 1951, the consistent refusal of distributors of motion pictures to grant first run’s to a drive-in theater was held to be proof of ‘collusion ‘. Each company had obviously valid reasons for its refusal, and the defense argued that each had made its own independant decision without knowing the decisions of the others. But the court ruled that “consciously parallel business practices” are sufficient proof of conspiracy and that “further proof of actual agreement among the defendants is unnecessary”. The Court of Appeals upheld this decision, suggesting that evidence of parallel action should transfer the burden of proof to the defendants “to explain away the inference of joint action” which they had not, apparently, explained away.
Consider for a moment, the implications of this case. If three businessmen reach independantly the same blatantly obvious business decision – do they then have to prove that they did not conspire? Or if two businessmen observe an intelligent business policy originated by a third – should they refrain from adopting it, for fear of a conspriacy charge? Or, if they adopt it, should he then find himself dragged into court and charged with conspiracy, on the grounds of the action taken by two men he had never heard of? And how then is he to “explain away” his presumed guilt and prove himself innocent?
From a lecture given by Ayn Rand at the Ford Hall Forum, Boston. December 17th, 1961