The Federal Trade Commission yesterday opened an investigation into possible anticompetitive practices and joint-venture arrangements in the motion picture industry and its principal export trade association.
The probe, run out of the FTC Los Angeles regional office, will center on a trade organization called the Motion Picture Export Association, which represents 10 major production companies in negotiations with foreign governments and firms for overseas distribution of movies.
FTC spokewoman Wendy Kaufman said in a telephone interview from Los Angeles that the FTC staff ahd inititated a preliminary investigation, and finally received authorization from the full commission to open a full-scale probe. She added that such authorization "does not mean that the commission has made any determination as to whether any violations of law have occured."
The MPEA, which is housed in the same building and has the same president and members as the Motion Picture Association of America, is a registered Webb-Pomerene association.
That means that the MPEA qualifies for a limited antitrust exemption for trade associations engaged in foreign trade. The Webb-Pomerene satute went into effect in 1918. It is designed to help U.S. trade be more competitive overseas.
According to Kaufman, the FTC probe will center on two areas:
Whether the MPEA has engaged in anticompetitive practices that may restrict the ability of independent American film producers and distributors to distribute films abroad effectively.
Whether joint venture type arrangements among the major motion picture companies may restrict competition unduly.
MPEA President Jack Valenti called the allegations "absolutely false. The logic is bewildering," he said.
In a telephone interview from New York, Valenti said the FTC is trying to prove that his organization is keeping independent American movie makers from marketing pictures overseas "because we don't distribute them abroad."
"But what they don't realize is that they are out of date," Valenti said. "Foreign distributers, who are used by American independent producers to distribute their pictures, are gaining a larger and larger share of the audience. The independents have no trouble distributing their films."
Valenti added that, "At a time when this country is bleeding from a trade deficit, how can the FTC go alter the movie industry, which adds half a billion dollars a year to the surplus balance of payments?"
"We are not dealing with an industry whichh simply puts out an economic product," said Harvey Saferstein, director of the FTC Los Angeles office. "Rahter, this industry disseminates ideas which help shape American cultures and American mores. For this reason, it is imperative that all film makers enjoy open access to the film making marketplace."
Saferstein added, "If barriers exist that restrict that access, the goal of the investigation is to break down those barriers and provide all American film makers with a fair opportunity to compete."
The investigation deals with a major source of Hollywood revenue. Foreign film rentals account for 40 to 50 percent of the motion picture industry's total rental income. In 1977, the industry's total worldwide film rental income was $1.36 billion of which foreign rentals accounted for $527 million, according to the industry trade paper Daily Variety.
The 10 members of the MPEA are Allied Artists Pictures Corp., Avco-Embassy Pictures Corp. Inc., MCA Inc. (Universal), Metro-Goldwyn-Mayer Inc., Paramount Pictures Corp., 20th Century-Fox Film Corp., United Artists, Walt Disney Productions and Warner Bros. Inc. CAPTION: Picture, Robert Strauss (left) talks with subcommittee Chairman Paul Sarbanes yesterday. By James K. W. Antherton-The Washington Post