Antitrust Concerns

One of the tobacco industry's legal concerns was that some of its jointly sponsored research projects might be construed as violating antitrust laws. Antitrust laws are generally designed to preserve competition

among sellers of goods and services by preventing or suppressing practices that create monopolies or restrain trade. Evidently, some attorneys in the industry believed that cooperation among the domestic tobacco companies in scientific research that had commercial ramifications, such as the same product modifications by all the companies, could be construed as an anticompetitive practice. For example, the joint effort by the American tobacco companies to sponsor the study of the cigarette additive Chemosol (described in chapter 6) may have created such a concern. Similarly, antitrust implications may be one reason for the evident lack of industry cooperation to produce a fire-safe cigarette. As noted earlier in this chapter, the industry has resisted efforts by Congress to mandate that cigarettes be fire-safe, because the industry does not wish to open the regulatory floodgates. Of course, the very regulatory void that the industry has so assiduously sought has left it with a lack of ground rules on what joint action the companies may safely take and with the concomitant jeopardy of the companies' being accused of collusion when they do act together.

The documents provide two examples of specific expressions of concern over possible antitrust problems. The first has to do with biological research. As subsequently described (in chapter 8), the Council for Tobacco Research funded a series of studies at Microbiological Associates in Bethesda, Maryland, on the effects of cigarette smoke on mice. Most of the studies involved inhalation of tobacco smoke. However, Microbiological Associates also conducted some short-term biological tests on tobacco smoke condensate. The purpose of the work was to attempt to identify specific compounds in cigarette smoke that were responsible for carcinogenesis, the implication being that these compounds, once identified, could be removed as part of the effort to develop a "safe" cigarette. As discussed in chapter 8, the work being conducted at Microbiological Associates aroused concern in tobacco industry lawyers, not only because the tests were "red light" tests that could be used against the industry in court but also because they represented a breach of antitrust laws. In a letter to Addison Yeaman, dated March 10, 1977, Ernest Pepples states,

I also question whether we come close to an antitrust problem when several companies are funding work in the area of identifying compounds or combination of compounds which may be responsible for biological activity. Certainly that runs away from my concept of the scope of CTR which is etiology and not identification of substances or compounds which ought to be removed from the product. What I have in mind is a contrast between product modification and etiology of diseases. {1816.01, p. 2}

The second example involves research on nicotine analogues (see chapter 3), perhaps the industry's greatest concern in the antitrust area. In a memorandum of April 4, 1978, from Pepples to various persons, which primarily concerns the CTR budget, Pepples notes:

American [Brands] has also concluded that part of the central nervous system/nicotine work [conducted by CTR] poses a question with respect to the assurances which the companies gave to the Justice Department to the effect that none of the scientific work at CTR would have commercial application. Philip Morris and Lorillard concur in the view that some of the central nervous system (CNS) work has commercial overtones, specifically work which would lead to blocking agents or substitutes for nicotine. {2010.02, p. 1}