Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, November 8, 1995                   TAG: 9511080061
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: ROCHESTER, N.Y.                                LENGTH: Medium

KODAK FREE FROM LEGAL SHACKLES

After a 2 1/2-year battle with the federal government, Eastman Kodak Co. is finally free of decades-old legal shackles designed to keep it from monopolizing the U.S. photographic market.

The Justice Department said Tuesday it will not seek a Supreme Court appeal of a federal ruling that set aside 1921 and 1954 consent decrees aimed at restraining Kodak's marketing practices.

The 1921 order prohibited Kodak from making ``private label'' film that carries brand names other than its own, while the 1954 order barred the company from including photofinishing costs in film prices.

``We're, of course, gratified with the Justice Department's decision,'' said Kodak spokesman Charles Smith. ``It provides Kodak with the flexibility to be more competitive on a global basis.''

Arguing that the decrees inhibited its ability to compete worldwide, Kodak went to court here in May 1993 to get them overturned. The Justice Department countered that Kodak's 70 percent U.S. market share gives the company power to dominate, and its witnesses included Kodak rival Fuji.

U.S. District Judge Michael A. Telesca agreed with Kodak, vacating the decrees in May 1994. His decision was upheld Aug. 4 by the 2nd U.S. Circuit Court of Appeals in New York.

The Justice Department had been expected to ask the nation's highest court to hear the case. It gave no reason why it planned not to proceed.

The orders had been designed to strip away Kodak's monopoly in the United States. But Kodak's dominance of U.S. film sales has been eroded by Fuji and private-label film makers in the last decade and it can no longer rely on double-digit growth in its film business.

In contrast, Kodak got the backing of the U.S. government in July when it accused the Japanese government and Tokyo-based Fuji of conspiring to deny it fair access to the Japanese photographic market over the last 20 years.

It said Fuji tightly controls film distribution in its home market through rebates, price controls and pressure on wholesalers and retailers.