AMC Theaters Under Investigation for Antitrust

AMC Theaters, one of the largest cinema chains in America, has been targeted by a Justice Department probe for alleged violations of state and federal antitrust law. Variety reports:

A Spanish-language Houston moviehouse sued AMC Theaters last month for using its market power to block it from getting studio licenses to screen films like “World War Z,” “Iron Man 3″ and “Fast & Furious 6.”

Viva Cinema Theaters said it went out of business six months after opening because AMC threatened distributors that it would not show any of their first-run movies, English or Spanish, at any of its 30-screen theaters in Houston if they licensed to Viva. The suit claimed violations of the Sherman Antitrust Act, tortious interference and violations of a Texas antitrust law.

Let’s say the accusations are 100% accurate. Should AMC’s alleged actions be punishable by law? Who’s rights were violated? Was Viva entitled to exhibit blockbuster films? Were studios entitled to distribution in AMC theaters?

Antitrust laws encroach upon the freedom of association, a critical individual right which should not be lost when wielded corporately. The freedom of association plays a vital role in the functioning of the market. It may seem distasteful for AMC to leverage its market position to exclude smaller competitors. But that’s what competition is, an attempt to excel and thus exclude others. The brutal interaction of competing self-interest produces both quality and efficiency.

There exists no right to run a successful movie theater. If AMC’s practices result in a bad product for consumers, opportunities for competitors will arise. That’s the check on big business power. The lack of such opportunities should not constitute a crime on AMC’s part.