dissenting.
This case, like many under the Sherman Act, turns upon the proper definition of the market. In defining the market in which du Pont’s economic power is to be measured, the majority virtually emasculate § 2 of the Sherman Act. They admit that “cellophane combines the desirable elements of transparency, strength and cheapness more definitely than any of” a host of other packaging materials. Yet they hold that all of those materials are so indistinguishable from cellophane as to warrant their inclusion in the market. We cannot agree that cellophane, in the language of Times-Picayune Publishing Co. v. United States, 345 U. S. 594, 613, is “the selfsame product” as glassine, greaseproof and vegetable parchment papers, waxed papers, sulphite papers, *415aluminum foil, cellulose acetate, and Pliofilm and other films.1
The majority opinion states that “[I]t will adequately illustrate the similarity in characteristics of the various products by noting here Finding 62 as to glassine.” But Finding 62 merely states the respects in which the selected flexible packaging materials are as satisfactory, as cellophane; it does not compare all the physical properties of cellophane and other materials. The Table incorporated in Finding 59 does make such a comparison, and enables us to note cellophane’s unique combination of qualities lacking among less expensive materials in varying degrees.2 A glance at this Table reveals that cellophane has a high bursting strength while glassine’s is low; that cellophane’s permeability to gases is lower than that of glassine; and that both its transparency and its resistance to grease and oils are greater than glassine’s. *416Similarly, we see that waxed paper’s bursting strength is less than cellophane's and that it is highly permeable to gases and offers no resistance whatsoever to grease and oils. With respect to the two other major products held to be close substitutes for cellophane, Finding 59 makes the majority’s market definition more dubious. In contrast to cellophane, aluminum foil is actually opaque and has a low bursting strength. And sulphite papers, in addition to being opaque, are highly permeable to both moisture and gases, have no resistance to grease and oils, have a lower bursting strength than cellophane, and are not even heat sealable. Indeed, the majority go further than placing cellophane in the same market with such products. They also include the transparent films, which are more expensive than cellophane. These bear even less resemblance to the lower priced packaging materials than does cellophane. The juxtaposition of one of these films, Cry-O-Rap, with sulphite in the Table facilitates a comparison which shows that Cry-O-Rap is markedly different and far superior.
If the conduct of buyers indicated that glassine, waxed and sulphite papers and aluminum foil were actually “the selfsame products” as cellophane, the qualitative differences demonstrated by the comparison of physical properties in Finding 59 would not be conclusive. But the record provides convincing proof that businessmen did not so regard these products. During the period covered by the complaint (1923-1947) cellophane enjoyed phenomenal growth. Du Pont’s 1924 production was 361,-249 pounds, which sold for $1,306,662. Its 1947 production was 133,502,858 pounds, which sold for $55,339,626. Findings 297 and 337. Yet throughout this period the price of cellophane was far greater than that of glassine, waxed paper or sulphite paper. Finding 136 states that in 1929 cellophane’s price was seven times that of glassine; in 1934, four times, and in 1949 still more than twice *417glassine’s price. Reference to DX-994, the graph upon which Finding 136 is based, shows that cellophane had a similar price relation to waxed paper and that sulphite paper sold at even less than glassine and waxed paper. We cannot believe that buyers, practical businessmen, would have bought cellophane in increasing amounts over a quarter of a century if close substitutes were available at from one-seventh to one-half cellophane’s price. That they did so is testimony to cellophane’s distinctiveness.
The inference yielded by the conduct of cellophane buyers is reinforced by the conduct of sellers other than du Pont. Finding 587 states that Sylvania, the only other cellophane producer, absolutely and immediately followed every du Pont price change, even dating back its price list to the effective date of du Pont’s change. Producers of glassine and waxed paper, on the other hand, displayed apparent indifference to du Pont’s repeated and substantial price cuts. DX-994 shows that from 1924 to 1932 du Pont dropped the price of plain cellophane 84%, while the price of glassine remained constant.3 And during the period 1933-1946 the prices for glassine and waxed paper actually increased in the face of a further 21% decline in the price of cellophane. If “shifts of business” due to “price sensitivity” had been substantial, glassine and waxed paper producers who wanted to stay in business would have been compelled by market forces to meet du Pont’s price challenge just as Sylvania was. The majority correctly point out that:
“An element for consideration as to cross-elasticity of demand between products is the responsiveness of the sales of one product to price changes of the other. If a slight decrease in the price of cellophane causes a considerable number of customers of other flexible wrappings to switch to cellophane, it would be an *418indication that a high cross-elasticity of demand exists between them; that the products compete in the same market.”
Surely there was more than “a slight decrease in the price of cellophane” during the period covered by the complaint. That producers of glassine and waxed paper remained dominant in the flexible packaging materials market without meeting cellophane’s tremendous price cuts convinces us that cellophane was not in effective competition with their products.4
Certainly du Pont itself shared our view. From the first, du Pont recognized that it need not concern itself with competition from other packaging materials. For example, when du Pont was contemplating entry into cellophane production, its Development Department reported that glassine “is so inferior that it belongs in an entirely different class and has hardly to be considered as a competitor of cellophane.” 5 This was still du Pont’s view in 1950 when its survey of competitive prospects wholly omitted reference to glassine, waxed paper or sul-phite paper and stated that “Competition for du Pont cellophane will come from competitive cellophane and from non-cellophane films made by us or by others.” 6
Du Pont’s every action was directed toward maintaining dominance over cellophane. Its 1923 agreements with La Cellophane, the French concern which first produced commercial cellophane, gave du Pont exclusive *419North and Central American rights to cellophane’s technology, manufacture and sale, and provided, without any limitation in time, that all existing and future information pertaining to the cellophane process be considered “secret and confidential,” and be held in an exclusive common pool.7 In its subsequent agreements with foreign licensees, du Pont was careful to preserve its continental market inviolate.8 In 1929, while it was still the sole domestic producer of cellophane, du Pont won its long struggle to raise the tariff from 25% to 60%, ad valorem, on cellophane imports,9 substantially foreclosing foreign competition. When Sylvania became the second American cellophane producer the following year and du Pont filed suit claiming infringement of its moistureproof patents, they settled the suit by entering into a cross-licensing agreement. Under this agreement, du Pont obtained the right to exclude third persons from use of any patentable moistureproof invention made during the next 15 years by the sole other domestic cellophane producer, and, by a prohibitive royalty provision, it limited Sylvania’s moistureproof production to approx-*420innately 20% of the industry’s moistureproof sales.10 The record shows that du Pont and Sylvania were aware that, by settling the infringement suit, they avoided the possibility that the courts might hold the patent claims invalid and thereby open cellophane manufacture to additional competition.11 If close substitutes for cellophane had been commercially available, du Pont, an enlightened enterprise, would not have gone to such lengths to control cellophane.
As predicted by its 1923 market analysis,12 du Pont’s dominance in cellophane proved enormously profitable from the outset. After only five years of production, when du Pont bought out the minority stock interests in its cellophane subsidiary, it had to pay more than fifteen times the original price of the stock.13 But such success was not limited to the period of innovation, limited sales and complete domestic monopoly. A confidential du Pont report shows that during the period 1937-1947, despite great expansion of sales, du Pont’s “operative return” (before taxes) averaged 31%, while its average “net return” (after deduction of taxes, bonuses, and fundamental research expenditures) was 15.9%.14 Such profits provide a powerful incentive for the entry of com*421petitors.15 Yet from 1924 to 1951 only one new firm, Sylvania, was able to begin cellophane production. And Sylvania could not have entered if La Cellophane’s secret process had not been stolen.16 It is significant that for 15 years Olin Industries, a substantial firm, was unsuccessful in its attempt to produce cellophane, finally abandoning the project in 1944 after having spent about $1,000,000.17 When the Government brought this suit, du Pont, “to reduce the hazard of being judged to have a monopoly of the U. S. cellophane business,” 18 decided to let Olin enter the industry. Despite this demonstration of the control achieved by du Pont through its exclusive dominion over the cellophane process, the District Court found that du Pont could not exclude competitors from the manufacture of cellophane. Finding 727. This finding is “clearly erroneous.”19 The majority avoid *422passing upon Finding 727 by stating that it is “immaterial ... if the market is flexible packaging material.” They do not appear to disagree with our conclusion, however, since they concede that “. . . it may be practically impossible for anyone to commence manufacturing cellophane without full access to du Pont’s technique.” The trial court found that
“Du Pont has no power to set cellophane prices arbitrarily. If prices for cellophane increase in relation to prices of other flexible packaging materials it will lose business to manufacturers of such materials in varying amounts for each of duPont cellophane’s major end uses.” Finding 712.
This further reveals its misconception ^ of the antitrust laws. A monopolist seeking to maximize profits cannot raise prices “arbitrarily.” Higher prices of course mean smaller sales, but they also mean higher per-unit profit. Lower prices will increase sales but reduce per-unit profit. Within these limits a monopolist has a considerable degree of latitude in determining which course to pursue in attempting to maximize profits. The trial judge thought that, if du Pont raised its price, the market would “penalize” it with smaller profits as well as lower sales.20 Du Pont proved him wrong. When 1947 operating earnings dropped below 26% for the first time in 10 years, it increased cellophane’s price 7% and boosted its earnings in 1948. Du Pont's division manager then reported that “If an operative return of 31% is considered inadequate then an upward revision in prices will be necessary to improve the return.” 21 It is this latitude with respect to price, this broad power of choice, that the antitrust *423laws forbid.22 Du Pout’s independent pricing policy and the great profits consistently yielded by that policy leave no room for doubt that it had power to control the price of cellophane. The findings of fact cited by the majority cannot affect this conclusion.23 For they merely demonstrate that, during the period covered by the complaint, du Pont was a “good monopolist,” i. e., that it did not engage in predatory practices and that it chose to maximize profits by lowering price and expanding sales. Proof of enlightened exercise of monopoly power certainly does not refute the existence of that power.
The majority opinion purports to reject the theory of “interindustry competition.” Brick, steel, wood, cement and stone, it says, are “too different” to be placed in the same market. But cellophane, glassine, wax papers, sul-phite papers, greaseproof and vegetable parchment papers, aluminum foil, cellulose acetate, Pliofilm and other films are not “too different,” the opinion concludes. The majority approach would apparently enable a monopolist of motion picture exhibition to avoid Sherman Act consequences by showing that motion pictures compete in substantial measure with legitimate theater, television, radio, sporting events and other forms of entertainment. Here, too, “shifts of business” undoubtedly accompany fluctuations in price and “there are market alternatives that buyers may readily use for their purposes.” Yet, in United States v. Paramount Pictures, 334 U. S. 131, where the District Court had confined the relevant market to that for nationwide movie exhibition, this Court remanded the case to the District Court with directions to determine whether there was a monopoly on the part of the five major distributors “in the first-run field for the entire *424country, in the first-run field in the 92 largest cities of the country, or in the first-run field in separate localities.” 334 U. S., at 172. Similarly, it is difficult to square the majority view with United States v. Aluminum Co. of America, 148 F. 2d 416, a landmark § 2 case. There Judge Learned Hand, reversing a district court, held that the close competition which “secondary” (used) aluminum offered to “virgin” aluminum did not justify including the former within the relevant market for measuring Alcoa’s economic power. Against these and other precedents, which the Court’s opinion approves but does not follow, the formula of “reasonable interchangeability,” as applied by the majority, appears indistinguishable from the theory of “interindustry competition.” The danger in it is that, as demonstrated in this case, it is “perfectly compatible with a fully monopolized economy.” 24
The majority hold in effect that, because cellophane meets competition for many end uses, those buyers for other uses who need or want only cellophane are not entitled to the benefits of competition within the cellophane industry. For example, Finding 282 shows that the largest single use of cellophane in 1951 was for wrapping cigarettes, and Finding 292 shows that 75 to 80% of all cigarettes are wrapped with cellophane. As the recent report of the Attorney General’s National Committee to Study the Antitrust Laws states: “In the interest of rivalry that extends to all buyers and all uses, competition among rivals within the industry is always important.” 25 (Emphasis added.) Furthermore, those buyers who have “reasonable alternatives” between cellophane *425and other products are also entitled to competition within the cellophane industry, for such competition may lead to lower prices and improved quality.
The foregoing analysis of the record shows conclusively that cellophane is the relevant market. Since du Pont has the lion’s share of that market, it must have monopoly power, as the majority concede.26 This being so, we think it clear that, in the circumstances of this case, du Pont is guilty of “monopolization.” The briefest sketch of du Pont’s business history precludes it from falling within the “exception to the Sherman Act prohibitions of monopoly power” (majority opinion, pp. 390-391) by successfully asserting that monopoly was “thrust upon” it. Du Pont was not “the passive beneficiary of a monopoly” within the meaning of United States v. Aluminum Co. of America, supra, at 429-430. It sought and maintained dominance through illegal agreements dividing the world market, concealing and suppressing technological information, and restricting its licensee’s production by prohibitive royalties,27 and through numerous maneuvers which might have been “honestly industrial” but whose necessary effect was nevertheless exclusionary.28 Du Pont cannot bear “the burden of *426proving that it owes its monopoly solely to superior skill. . . .” (Emphasis supplied.) United States v. United Shoe Machinery Corp., 110 F. Supp. 295, 342, aff’d per curiam, 347 U. S. 521.
Nor can du Pont rely upon its moistureproof patents as a defense to the charge of monopolization. Once du Pont acquired the basic cellophane process as a result of its illegal 1923 agreements with La Cellophane, development of moistureproofing was relatively easy. Du Pont’s moistureproof patents were fully subject to the exclusive pooling arrangements and territorial restrictions established by those agreements. And they were the subject of the illicit and exclusionary du Pont-Sylvania agreement. Hence, these patents became tainted as part and parcel of du Pont’s illegal monopoly. Cf., Mercoid Corp. v. Mid-Continent Co., 320 U. S. 661, 670. Any other result would permit one who monopolizes a market to escape the statutory liability by patenting a simple improvement on his product.
If competition is at the core of the Sherman Act, we cannot agree that it was consistent with that Act for the enormously lucrative cellophane industry to have no more than two sellers from 1924 to 1951. The conduct of du Pont and Sylvania illustrates that a few sellers tend to act like one and that an industry which does not have a competitive structure will not have competitive behavior. The public should not be left to rely upon the dispensations of management in order to obtain the benefits which normally accompany competition. Such beneficence is of uncertain tenure. Only actual competition can assure long-run enjoyment of the goals of a free economy.
We would reverse the decision below and remand the cause to the District Court with directions to determine the relief which should be granted against du Pont.
In Times-Picayune Publishing Co. v. United States, 345 U. S. 594, 612, note 31, the Court said:
“For every product, substitutes exist. But a relevant market cannot meaningfully encompass that infinite range. The circle must be drawn narrowly to exclude any other product to which, within reasonable variations in price, only a limited number of buyers will turn; in technical terms, products whose ‘cross-elasticities of demand’ are small.”
See 118 F. Supp., at 64. The majority opinion quotes at length from Stocking and Mueller, The Cellophane Case, XLV Amer. Economic Rev. 29, 48-49, in noting the comparative characteristics of cellophane and other products. Unfortunately, the opinion fails to quote the conclusion reached by these economists. They state: “The [trial] court to the contrary notwithstanding, the market in which cellophane meets the ‘competition’ of other wrappers is narrower than the market for all flexible packaging materials.” Id., at 52. And they conclude that “. . . cellophane is so differentiated from other flexible wrapping materials that its cross elasticity of demand gives du Pont significant and continuing monopoly power.” Id., at 63.
The record provides no figures for waxed paper prior to 1933.
See Stocking and Mueller, The Cellophane Case, XLV Amer. Economic Rev. 29, 56.
R. 3549, GX-392. The record contains many reports prepared by du Pont from 1928 to 1947. They virtually ignore the possibility of competition from other packaging materials. E. g., R. 3651, 3678, 3724, 3739.
R. 4070. It is interesting to note that du Pont had almost 70% of the market which this report considered relevant.
See Finding 24; GX-1001, R. 3253; and GX-1002, R. 3257-3260. The agreement of June 9, 1923, in which the parties agreed to divide the world cellophane market, is illegal per se under Timken Roller Bearing Co. v. United States, 341 U. S. 593, 596-599. The supplementary agreement providing for the interchange of technological information tightened the cellophane monopoly and denied to others any access to what went into the common pool — all in violation of United States v. National Lead Co., 332 U. S. 319, 328. As was said in United States v. Griffith, 334 U. S. 100, 107: “The anti-trust laws are as much violated by the prevention of competition as by its destruction.”
See Finding 602; GX-1087, R. 3288; and GX-1109, R. 3301.
Finding 633. On appeal from an adverse decision by the Commissioner of Customs, du Pont persuaded the United States Customs Court to order reclassification of cellophane.
The agreement is summarized in Finding 545 and appears in full in GX-2487, R. 3383-3408. We believe that under the principles set forth in Transparent-Wrap Machine Corp. v. Stokes & Smith Co., 329 U. S. 637, 646, this agreement violated the Sherman Act.
GX-2811, R. 6073-6074.
R. 3563.
When du Pont Cellophane was organized in 1923, du Pont received 52,000 shares of its stock in return for $866,666.67 in cash, or $16.67 per share. F. 22; DX-735, R. 5402. In 1929 du Pont had to surrender stock having a market value of $12,129,600 in order to obtain the 48,000 shares held by French interests, a sum equal to $252.70 per share. DX-735, R. 5403.
R. 4155.
See Stocking and Mueller, The Cellophane Case, XLV Amer. Economic Rev. 29, 60-63, where the authors compare the domestic economic history of rayon with that of cellophane. The first American rayon producer earned 64.2% on its investment in 1920, thereby attracting du Pont. After a loss in 1921, du Pont’s average return for the next four years was roughly 32%. As more firms began rayon production, du Pont’s and the industry’s return on investment began to drop. When 6 new firms entered the industry in 1930, bringing the number of producers to 20, average industry earnings for that year declined to 5% and du Pont suffered a net loss. “From the beginning of the depression in 1929 through the succeeding recovery and the 1938 recession du Pont averaged 29.6 per cent before taxes on its cellophane investment. On its rayon investment it averaged only 6.3 per cent.” Id., at 62-63.
In 1924 two of La Cellophane’s principal officials absconded with complete information on the cellophane process. A Belgian concern was then set up to use this process in making cellophane, and it later organized Sylvania as an American affiliate. Findings 615-618.
R. 2733-2736.
See memorandum du Pont submitted to prospective entrants. R. 3893.
See Rule 52 (a), Federal Rules of Civil Procedure.
118 F. Supp., at 206.
R. 4154-4155.
See, e. g., American Tobacco Co. v. United States, 328 U. S. 781, 805-806.
See note 31, majority opinion.
Adams, The “Rule of Reason”: Workable Competition or Workable Monopoly?, 63 Yale L. J. 348, 364.
Report of Attorney General’s National Committee to Study the Antitrust Laws, p. 322. The majority decision must be peculiarly frustrating to the cigarette industry, whose economic behavior has been restrained more than once by this Court in the interest of *425competition. See American Tobacco Co. v. United States, 328 U. S. 781; United States v. American Tobacco Co., 221 U. S. 106.
“If cellophane is the ‘market’ that du Pont is found to dominate, it may be assumed it does have monopoly power over that ‘market.’ Monopoly power is the power to control prices or exclude competition. It seems apparent that du Pont’s power to set the price of cellophane has only been limited by the competition afforded by other flexible packaging materials. Moreover, it may be practically impossible for anyone to commence manufacturing cellophane without full access to du Pont’s technique.” Majority opinion, ante, pp. 391-392.
See notes 7 and 10, our dissent.
See United States v. Aluminum Co. of America, 148 F. 2d 416, 431.