The Federal Trade Commission accused E.I. du Pont de Nemours & Co. yesterday of attempting to monopolize the production of a key ingredient of paint, plastics and other materials.
The product - titanium dioxide - is a white pigment used primarily to whiten and brighten paints and plastics and to add opacity to paper.
The complaint alleged that Du Pont used its dominant position, size and economic power unfairly to frustrate the growth of its smaller domestic competitors and to forestall new competition from foreign producers.
The complaint does not allege that Du Pont has a monopoly - it is said to account for just over 40 percent of domestic and production - but that it tried to get one. The commission served notice that if it wins its case, it may order Du Pont to divest itself of a substantial amount of its major production facilities, as well as require royalty-free licensing of all of its technology used in producing the pigment.
The FTC issues a complaint when it has "reason to believe" the law has been violated; the complaint initiates a formal proceeding conducted by an administrative law judge.
Irving S. Shapiro, chairman of Du Pont, said yesterday the complaint was wholly without basis.
"There are six domestic manufacturers of titanium dioxide and Du Pont has become the leading producer in thus industry as a result of proprietary technology developed by the company in the 1950s," he said. He added that the company would ask the agency to expedite the hearing "so that this issue can be settled on its merits as promptly as possbile."
According to the complaint, Du Pont, the nation's principal producer, made more than $265 million of titanium dioxide in 1976 out of a total market of just over $600 million. The FTC complaint says the top four firms, including Du Pont, account for more than 80 percent of domestic production.
The complaint alleges that as early as 1972, Du Pont engaged in unfair methods of competition and unfair acts and practices to limit its competition in violation of the Federal Trade Commission Act.
The firm was charged with adopting and implementing a plan to expand its production capacity by an amount sufficient to enable the company to capture substantially all growth in domestic demand for the pigment through at least the 1980s.
Du Pont also is charged with adopting and implementing a pricing policy designed to frustrate the growth of smaller domestic producers and to keep out competition from foreign companies.
Alfred F. Dougherty Jr., director of the FTC's Bureau of Competition, said the Du Pont case will be followed by others involving exclusionary conduct by dominant firms in concentrated industries, including conduct which tends to keep other firms from entering a market or expanding within an industry.
"The . . . recommendation that the commission issue this complaint reflects my concern that the competition statues must be used frequently and aggressively against single firm abuse of market power in concentrated industries," he said.
The vote to issue the complaint was 3 to 1.