Public Policy: Nine Counts Against 3M

Few U.S. companies better personify corporate achievement than St. Paul’s Minnesota Mining & Manufacturing Co., known for short as “3M.” Sales of 3M products ranging from Scotch tape to missile-tracking components have skyrocketed from $4,700,000 in 1931 to $549,700,000 last year. Hundreds of U.S. investors who put their trust—and dollars —in research-minded 3M have blossomed with new wealth as the company’s stock soared, split and soared again.

Last week, bringing criminal charges against the company, the Justice Department contended that hard work and imaginative research did not constitute the whole story of 3M’s success. For the past three decades, the nine-count indictment said, 3M has systematically violated the Sherman Antitrust Act by attempting to monopolize markets in sealing and masking tapes, magnetic tape and aluminum lithograph plates. Among the charges: > That in exchange for licenses to produce 3M-patented products, 3M demanded of competitors the right to fix prices and production and dictate markets. > That to supplement the patent-licensing tactic, 3M banded together with existing competitors to amass new patents in order to choke off new competition. >That 3M was in the habit of bringing, or threatening to bring, patent-infringement suits against competitors who delayed in knuckling under to demands. >That 3M struck a bargain with New Jersey’s Johnson & Johnson not to move into surgical-tape production if Johnson & Johnson would stay out of the sandpaper business.

The grand jury, thus far, has cast 3M as the heavy in the Justice Department’s latest antitrust drama. It has named ten other companies and the Illinois Institute of Technology’s Armour Research Foundation as co-conspirators but has not asked for their appearance in court as defendants. Refusing to comment on the charges in detail, 3M President Herbert P. Buetow last week would only say that it is “firm company policy to operate in conformity with the antitrust laws.” But he did note pointedly that Justice Department trustbusters spent 15 years looking into 3M’s affairs before asking a criminal indictment.