Question: In 1981 the FTC brought an antitrust suit against Xidex Corporation for its earlier acquisition of two rivals in the microfilm market. By acquiring Scott

In 1981 the FTC brought an antitrust suit against Xidex Corporation for its earlier acquisition of two rivals in the microfilm market. By acquiring Scott Graphics, Inc., in 1976 and Kalvar Corporation in 1979, Xidex increased its market share of the U.S. microfilm market from 46 to 71 percent. As a result, the price of microfilm increased: The price of one type of microfilm (diazo) increased by 11 percent, and the price of a second type (vesicular) increased by 23 percent. These price hikes were large enough that Xidex recovered the cost of acquiring its two rivals ($4.2 million for Scott Graphics and $6 million for Kalvar) in less than two years. To settle the antitrust lawsuit, Xidex agreed to license its microfilm technology at bargain prices to other firms.

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