EUR-Lex - 31976D0172 - EN
31976D0172
European Union
§ ARTICLE 85
ARTICLE 85 ( 1 ) PROHIBITS AS INCOMPATIBLE WITH THE COMMON MARKET ANY AGREEMENT BETWEEN UNDERTAKINGS WHICH MAY AFFECT TRADE BETWEEN MEMBER STATES AND WHICH HAS AS ITS OBJECT OR EFFECT THE PREVENTION , RESTRICTION OR DISTORTION OF COMPETITION WITHIN THE COMMON MARKET .
1 . BAYER AND GIST-BROCADES ARE UNDERTAKINGS WITHIN THE MEANING OF ARTICLE 85 .
2 . THE AGREEMENTS BETWEEN THEM ARE AGREEMENTS WITHIN THE MEANING OF ARTICLE 85 .
3 . THE OBJECT AND EFFECT OF THE AGREEMENTS IS TO RESTRICT COMPETITION WITHIN THE COMMON MARKET .
( A ) COMPETITION BETWEEN THE TWO FIRMS IN RESEARCH IS RESTRICTED BY THE OBLIGATION IMPOSED BY THE LICENSING AGREEMENT TO ISSUE LICENCES TO EACH OTHER NOT ONLY FOR IMPROVEMENTS TO EXISTING PROCESSES FOR THE MANUFACTURE OF 6-APA BUT ALSO FOR NEW , INDEPENDENTLY DEVELOPED PROCESSES . THE EFFECT IS THAT FOR THE DURATION OF THE AGREEMENT NEITHER OF THE TWO FIRMS CAN OBTAIN A COMPETITIVE ADVANTAGE OVER THE OTHER IN RESEARCH NOR CAN EITHER GAIN INDIVIDUALLY BY KEEPING RESEARCH RESULTS TO ITSELF .
( B ) COMPETITION BETWEEN THE TWO FIRMS IS FURTHER RESTRICTED IN THE MANUFACTURE OF RAW PENICILLIN AND 6-APA .
BAYER AND GIST-BROCADES HAVE BEEN AND STILL ARE COMPETITORS IN THE MANUFACTURE AND SALE OF RAW PENICILLIN , 6-APA AND SPECIAL PENICILLIN DERIVATIVES . BEFORE THE AGREEMENTS WERE CONCLUDED BOTH FIRMS WERE IN BUSINESS INDEPENDENTLY OF EACH OTHER AT ALL MARKETING STAGES . AT THE TIME THE AGREEMENT WAS MADE , BOTH WERE SUFFICIENTLY LARGE AND EXPERIENCED TO BE ABLE INDEPENDENTLY TO EXPAND THEIR PRODUCTION PLANTS OR SET UP NEW PLANTS IN ORDER TO MEET RISING DEMAND . THE LARGER OF THE TWO , BAYER COULD , AS ITS INTERNAL PLANNING DOCUMENTS CONFIRM , HAVE ITSELF , WITHOUT ANY OUTSIDE ASSISTANCE , MADE THE HEAVY INVESTMENT REQUIRED IN ORDER TO SET UP A NEW PENICILLIN PLANT .
GIST-BROCADES COULD HAVE CONTINUED PRODUCING 6-APA IN ITS OWN PLANT , USING THE PROCESS WHICH IT HAD ITSELF DEVELOPED AND PATENTED , AND IF NECESSARY COULD HAVE EXPANDED ITS PRODUCTION WITHOUT BAYER'S HELP .
IN EACH GIVING UP PART OF ITS BUSINESS IN FAVOUR OF THE OTHER , BAYER AND GIST-BROCADES ARE OPERATING A SPECIALIZATION ARRANGEMENT SUPPORTED BY LONG-TERM SUPPLY CONTRACTS AND JOINT INVESTMENT ARRANGEMENTS . FOR THE DURATION OF THE RECIPROCAL LONG-TERM SUPPLY CONTRACTS , THEY HAVE IN EFFECT AGREED NOT TO COMPETE WITH EACH OTHER IN THE MANUFACTURE OF THE INTERMEDIATE PRODUCT WHICH EACH HAS LEFT TO THE OTHER , ALTHOUGH BOTH COULD HAVE CONTINUED TO PRODUCE . IN THE CASE OF 6-APA THE TWO FIRMS THEMSELVES HAVE STATED THAT EVEN PROCESSING FIRMS WHICH HAD NEVER BEEN IN BUSINESS AS MANUFACTURERS BEFORE COULD ENTER THE MARKET ON THE MANUFACTURING SIDE AND THAT THEY HAVE TO CONSIDER THIS FACTOR WHEN SELLING 6-APA TO SUCH FIRMS . THIS APPLIES ALL THE MORE TO GIST-BROCADES , BECAUSE IT IS A PATENT HOLDER WITH EXPERIENCE OF MANUFACTURE .
THE AGREEMENTS IN FACT CONTAIN NO EXPRESS PROVISION FOR THE PARTIES TO CEASE COMPETING IN THIS WAY . HOWEVER , IN THE COMMISSIONS' VIEW IT IS CLEAR FROM ALL THE CIRCUMSTANCES OF THE CASE THAT THEY MUST HAVE AGREED TO DO SO . BAYER GAVE UP MANUFACTURING RAW PENICILLIN AND GIST-BROCADES GAVE UP MANUFACTURING 6-APA SIMULTANEOUSLY , AND BETWEEN THE TWO ACTIONS THE CAUSAL LINK IS EVIDENT . NEITHER OF THE TWO FIRMS WISHED BY GIVING UP ITS PRODUCTION TO BECOME UNILATERALLY DEPENDENT ON THE OTHER , SINCE BOTH FEARED THAT " THE EVENTUAL OUTCOME OF SUCH A ONE-SIDED RELATIONSHIP WOULD BE A BATTLE FOR MARKET SHARES " . EACH HAS BEEN FINANCIALLY INVOLVED IN THE OTHER'S NEW OR EXPANDED PLANTS AND EACH HAS AGREED TO PROVIDE ADDITIONAL FINANCE WHEN NECESSARY . IT IS IN THE INTERESTS OF BOTH TO SEE THAT THESE PLANTS ARE OPERATED AS ECONOMICALLY AS POSSIBLE , IN OTHER WORDS TO OBTAIN THEIR REQUIREMENTS AS FAR AS POSSIBLE FROM THESE PLANTS . ON THE TERMINATION OF THE AGREEMENTS EACH HAS UNDERTAKEN TO TRANSFER TO THE OTHER THE MOULD ( RAW PENICILLIN ) OR KNOW-HOW ( 6-APA ) REQUIRED FOR RENEWED INDEPENDENT PRODUCTION . GIST-BROCADES HAS UNDERTAKEN TO GIVE BAYER LICENCES NOT ONLY FOR IMPROVEMENTS TO ITS EXISTING 6-APA MANUFACTURING PROCESS BUT ALSO FOR ENTIRELY NEW PROCESSES . THIS PROCEDURE IS LOGICAL ONLY IF THE FIRMS ARE TO SPECIALIZE AND TO CONTINUE DOING SO EVEN IF THE OTHER PARTY DISCOVERS A NEW PROCESS . GIVEN THESE CIRCUMSTANCES , IT WOULD SERVE NEITHER THE SPIRIT NOR THE PURPOSE OF THE AGREEMENT IF , DURING ITS COURSE , ONE PARTY WAS ABLE TO BECOME AN INDEPENDENT COMPETITOR IN THE MANUFACTURING PRESERVE OF THE OTHER .
( C ) THE SPECIALIZATION AGREEMENT IS SUPPORTED BY RECIPROCAL LONG-TERM SUPPLY CONTRACTS . ALTHOUGH THE TWO FIRMS ARE NOT EXPRESSLY REQUIRED TO OBTAIN ALL THEIR REQUIREMENTS UNDER THESE CONTRACTS , THE MUTUAL LONG-TERM COMMITMENT AND MUTUAL DEPENDENCE CREATED BY THE SPECIALIZATION AND THE JOINT INVESTMENTS INEVITABLY MEAN THAT EACH FIRM WILL GENERALLY TRY TO COVER ITS REQUIREMENTS BY BUYING FROM THE OTHER . THE PRICES CALCULATED BY THE JOINTLY-ESTABLISHED FORMULA ARE SO FAVOURABLE THAT PURCHASES FROM THIRD PARTIES WOULD BE POINTLESS UNLESS , FOR UNFORESEEABLE REASONS , ONE OF THE FIRMS COULD NOT PRODUCE ENOUGH OR COULD NOT PRODUCE AT ALL .
4 . THE AGREEMENTS INVOLVE UNDERTAKINGS FROM MORE THAN ONE MEMBER STATE . THEY CONCERN GOODS WHICH , WHETHER PROCESSED OR NOT , CAN BE AND ARE DEALT WITH IN TRADE BETWEEN MEMBER STATES .
THE AGREEMENTS GIVE EACH FIRM THE OPPORTUNITY TO STRENGTHEN ITS POSITION ON ITS RESPECTIVE DOMESTIC MARKETS , TO SHIELD ITSELF FROM THE INFLUENCE OF THE OTHER AND TO COORDINATE ITS POLICY WITH THE OTHER ON THOSE MARKETS , WHICH THEY BOTH SUPPLY . THEY MAY THEREFORE AFFECT TRADE BETWEEN MEMBER STATES AND CONSEQUENTLY FALL WITHIN THE SCOPE OF ARTICLE 85 ( 1 ) .
III
APPLICABILITY OF ARTICLE 85 ( 3 )
UNDER ARTICLE 85 ( 3 ) , THE PROVISIONS OF ARTICLE 85 ( 1 ) OF THE TREATY MAY BE DECLARED INAPPLICABLE IN THE CASE OF ANY AGREEMENT WHICH CONTRIBUTES TO THE IMPROVEMENT OF THE PRODUCTION OR DISTRIBUTION OF GOODS OR TO THE PROMOTION OF TECHNICAL OR ECONOMIC PROGRESS , WHILE ALLOWING CONSUMERS A FAIR SHARE OF THE RESULTING BENEFIT , AND WHICH DOES NOT :
( A ) IMPOSE ON THE UNDERTAKINGS CONCERNED RESTRICTIONS WHICH ARE NOT INDISPENSABLE TO THE ATTAINMENT OF THESE OBJECTIVES ;
( B ) AFFORD SUCH UNDERTAKINGS THE POSSIBILITY OF ELIMINATING COMPETITION IN RESPECT OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION .
1 . FOR THE AGREEMENTS TO CONTRIBUTE TO THE IMPROVEMENT OF PRODUCTION OR DISTRIBUTION , OR TO PROMOTE TECHNICAL OR ECONOMIC PROGRESS , THEY MUST OBJECTIVELY CONSTITUTE AN IMPROVEMENT ON THE SITUATION THAT WOULD OTHERWISE EXIST . THE FUNDAMENTAL PRINCIPLE IN THIS RESPECT , ESTABLISHED AT THE TIME THE COMMON MARKET WAS FORMED , LAYS DOWN THAT FAIR AND UNDISTORTED COMPETITION IS THE BEST GUARANTEE OF REGULAR SUPPLY ON THE BEST TERMS . THUS THE QUESTION OF A CONTRIBUTION TO ECONOMIC PROGRESS WITHIN THE MEANING OF ARTICLE 85 ( 3 ) CAN ONLY ARISE IN THOSE EXCEPTIONAL CASES WHERE THE FREE PLAY OF COMPETITION IS UNABLE TO PRODUCE THE BEST RESULT ECONOMICALLY SPEAKING .
IN THE PRESENT CASE , A SPECIALIZATION AGREEMENT FOR PRODUCTION HAS BEEN MADE BETWEEN TWO FIRMS WHICH ARE FINANCIALLY STRONG AND OF IMPORTANCE AND EXPERIENCE ON THE MARKET CONCERNED . IN SUCH CIRCUMSTANCES IT CANNOT BE ASSUMED , ON THOSE FACTS ALONE , THAT NEITHER FIRM WOULD , WITHOUT THE ASSISTANCE OF THE OTHER , HITHERTO A MAJOR COMPETITOR , BE ABLE TO BEAR THE COSTS AND ECONOMIC RISKS INVOLVED IN EXPANDING THE CAPACITY NEEDED FOR THE RATIONALIZATION OF PRODUCTION .
ACCOUNT MUST HOWEVER BE TAKEN OF THE LIMITATIONS ON BAYER'S ABILITY TO EXPAND ITS RAW PENICILLIN PLANTS TO COVER RISING SUPPLY REQUIREMENTS . THE QUALITY AND YIELD OF BAYER'S RAW-PENICILLIN STRAIN WERE VERY LOW , AND AN INCREASE IN YIELD COULD NOT BE EXPECTED . IN ORDER TO IMPROVE PRODUCTION OF RAW PENICILLIN , BAYER HAD TO OBTAIN THE AID OF A FIRM EXPERIENCED IN FERMENTATION TECHNIQUES . THE IMPROVEMENT AND EXPANSION OF BAYER'S OWN EXISTING RAW PENICILLIN PLANT WITH THE HELP OF GIST-BROCADES WAS NOT AS ECONOMICAL FOR TECHNICAL REASONS , AS A JOINTLY FINANCED EXPANSION OF GIST-BROCADES' RAW PENICILLIN CAPACITIES . AT THE SAME TIME THIS ARRANGEMENT WITH GIST MADE IT POSSIBLE FOR BAYER TO CHANGE FROM RAW PENICILLIN TO THE MANUFACTURE OF 6-APA IN LARGER QUANTITIES AND UNDER MODERNIZED CONDITIONS . THE AGREEMENTS THEREFORE CONTRIBUTE TO THE IMPROVEMENT OF PRODUCTION .
2 . AS A RESULT OF THE AGREEMENTS BOTH FIRMS HAVE BEEN ABLE TO EXPAND THEIR PRODUCTION TO AN EXTENT WHICH SHOULD ALLOW THE CONSUMER TO ENJOY THE RESULTING BENEFIT . THESE BENEFITS WILL STEM FROM THE IMPROVED PRODUCTION WHICH THE COMBINED TECHNICAL KNOWLEDGE OF THE FIRMS MAKES POSSIBLE . FIRMS WHICH DO NOT HAVE RAW PENICILLIN OR 6-APA PRODUCTION FACILITIES AT THEIR DISPOSAL WILL NOW BE ABLE TO OBTAIN THESE PRODUCTS IN LARGER QUANTITIES FROM THE PARTIES TO THE AGREEMENT , PARTICULARLY FROM GIST-BROCADES , WHOSE SALES TO OTHER FIRMS OF RAW PENICILLIN AND OF 6-APA HAVE NEARLY TRIPLED DURING THE YEARS 1971-74 , WHILE PRICES HAVE SHOWN A DOWNWARD TREND . AS A RESULT THOSE OTHER FIRMS HAVE BEEN ABLE TO PRODUCE LARGER QUANTITIES OF PENICILLIN SPECIALITIES AND TO MARKET THEM IN COMPETITION WITH BAYER AND GIST-BROCADES . THE GREATER NUMBER OF END-PRODUCTS AVAILABLE ON THE MARKET AND THE GENERAL TREND TO LOWER PRICES SHOW THAT THE CONSUMER IS RECEIVING A FAIR SHARE OF THE BENEFITS OF THE AGREEMENT . HOWEVER , IN ORDER THAT THE COMMISSION MAY FOLLOW DEVELOPMENTS ON THE MARKET , CERTAIN OBLIGATIONS SHOULD BE IMPOSED UPON THE PARTIES .
3 . ALL THE CLAUSES OF THE AGREEMENTS AS AMENDED ARE INDISPENSABLE TO THE ATTAINMENT OF THE STATED OBJECTIVES .
( A ) THE DECISION BY EACH FIRM THAT FOR THE DURATION OF THE AGREEMENT IT WILL NOT MANUFACTURE THE SPECIALIZED PRODUCT ON WHICH THE OTHER WILL CONCENTRATE IS ESSENTIAL , AS ARE THE LONG-TERM MUTUAL SUPPLY CONTRACTS . THERE ARE , HOWEVER , NO EXCLUSIVE SUPPLY CONDITIONS . IF ADDITIONAL SUPPLIES ARE REQUIRED , EACH FIRM IS FREE TO OBTAIN ITS NEEDS ON THE OPEN MARKET . THUS EACH FIRM IS PROVIDED WITH A BASIS SUFFICIENT TO PERMIT IT TO DEVELOP ITS PRODUCTION AND MARKETING PLANS WHILE REMAINING FREE TO MAKE ITS OWN DECISIONS AS TO THE UTILIZATION OR EXPANSION OF THAT PART OF ITS PRODUCTION CAPACITY IN THE FIELD COVERED BY THE SPECIALIZATION AGREEMENTS WHICH IS NOT REQUIRED TO FULFIL ITS SUPPLY COMMITMENTS . BAYER IS ABLE TO EXPAND ITS 6-APA PRODUCTION AS IT THINKS FIT WITH A VIEW TO PROCESSING GREATER QUANTITIES OF SEMISYNTHETIC PENICILLIN SPECIALITIES . GIST-BROCADES IS FREE TO DETERMINE ITSELF THE AMOUNT OF RAW PENICILLIN TO BE PRODUCED AND THEREFORE THE QUANTITY TO BE PROCESSED INTO EITHER OF THE STERILE SALTS PENICILLIN G , OR V OR INTO 7-ADCA , THE INTERMEDIARY PRODUCT FOR THE MANUFACTURE OF CEPHALOSPORIN . EACH FIRM IS REQUIRED TO MAKE A PROPORTIONATE FINANCIAL CONTRIBUTION ONLY WHEN IT SEEKS FROM THE OTHER QUANTITIES IN EXCESS OF THE CAPACITIES OF THE JOINTLY FINANCED PLANT .
( B ) IN THE EARLIER VERSIONS OF THE AGREEMENT THERE WAS NO SUCH PROVISION FOR SEPARATE ACTION ON THE MARKET INDEPENDENTLY OF THE SPECIALIZATION ARRANGEMENTS . THE PLANTS WERE ORIGINALLY TO BE TRANSFERRED TO JOINT SUBSIDIARIES IN WHICH BOTH FIRMS WERE TO HOLD SHARES AND APPOINT DIRECTORS . THE FORMATION OF THESE JOINT SUBSIDIARIES WOULD HAVE HAD THE EFFECT OF BRINGING THE PRODUCTION OF RAW PENICILLIN AND 6-APA AND INVESTMENT UNDER JOINT CONTROL . SINCE EACH FIRM WAS TO BE EQUALLY REPRESENTED , BOTH IN THE MANAGEMENT OF THE SUBSIDIARY AND ON THE COORDINATING COMMITTEE , EITHER WOULD HAVE BEEN ABLE TO VETO ANY MANAGEMENT DECISION WITH WHICH IT DID NOT AGREE . THE RESULT WOULD INEVITABLY HAVE BEEN THAT OUTPUT WOULD HAVE BEEN DETERMINED BY JOINT AGREEMENT ; NEITHER FIRM WOULD HAVE BEEN ABLE , WITHOUT THE OTHER'S APPROVAL , TO INCREASE THE QUANTITIES AVAILABLE TO IT FOR RESALE TO OTHER FIRMS OR FOR PROCESSING , AND HENCE TO INCREASE , TO THE DETRIMENT OF THE OTHER , THE QUANTITIES SUPPLIED TO THE MARKET BY IT .
IT WAS NOT POSSIBLE TO REGARD SUCH AN EXTENSIVE COMPETITIVE RESTRICTION ON INVESTMENT AND PRODUCTION AS INDISPENSABLE TO THE SPECIALIZATION AGREEMENT .
( C ) THE NO-CHALLENGE CLAUSE IN THE LICENSING AGREEMENT HAS ALSO BEEN REMOVED AS AN UNNECESSARY RESTRICTION . IF GIST-BROCADES AND BAYER , TWO OF THE WORLD'S LARGEST 6-APA MANUFACTURERS , HAD CONTINUED TO AGREE NOT TO CONTEST THE VALIDITY OF EACH OTHER'S PATENTS , THE RESULT MIGHT HAVE BEEN THAT THIRD PARTIES WOULD HAVE BEEN PREVENTED FROM EXPLOITING FREELY FOR THE BENEFIT OF THE CONSUMER PROCESSES WHICH DID NOT IN FACT MERIT THE PROTECTION OF A PATENT .
( D ) ON THE OTHER HAND , THE REQUIREMENT ON THE PARTIES TO ISSUE LICENCES BOTH IN RESPECT OF IMPROVEMENTS TO THE EXISTING PROCESSES AND OF NEW 6-APA MANUFACTURING PROCESSES IS AN INDISPENSABLE PART OF THE SPECIALIZATION SCHEME , SINCE IT PERMITS THE OPTIMUM USE OF PLANT FOR THE LATEST AND MOST ECONOMIC PROCESSES . SINCE THE LICENCES ARE NOT TO BE EXCLUSIVE , THEY CAN BE ISSUED TO OTHER FIRMS . AN OBLIGATION SHOULD BE IMPOSED WHICH WILL ENABLE THE COMMISSION TO SUPERVISE THE OPERATION OF THIS CLAUSE .
( E ) THUS AGREEMENTS , AS AMENDED , NO LONGER CONTAIN ANY RESTRICTIONS WHICH ARE NOT ECONOMICALLY INDISPENSABLE . THE DECISIVE FACTOR IS THAT NEITHER ON PAPER NOR IN PRACTICE IS EITHER FIRM IN A POSITION TO PREVENT OR HINDER FREE TRADE WITHIN THE COMMUNITY IN 6-APA , WHETHER IT BE MANUFACTURED BY GIST-BROCADES' , BAYER'S , OR ANY OTHER PROCESS .
4 . THE AGREEMENTS DO NOT AFFORD THE UNDERTAKINGS CONCERNED THE POSSIBILITY OF ELIMINATING COMPETITION IN RESPECT OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION .
( A ) IN CONSIDERING THE QUESTION OF EXEMPTION THE MARKET SITUATION WITHIN THE COMMON MARKET CANNOT BE TAKEN IN ISOLATION , BECAUSE IT IS SO CLOSELY ASSOCIATED WITH THE SITUATION ON THE WORLD MARKET . BOTH RAW PENICILLIN AND 6-APA ARE MARKETED WORLDWIDE WITHOUT REGARD TO ORIGIN . TRANSPORT COSTS ARE NOT SIGNIFICANT . MANUFACTURERS FROM THIRD COUNTRIES OFFER THEIR PRODUCTS FOR SALE WITHIN THE COMMON MARKET AND MANUFACTURERS FROM WITHIN THE COMMUNITY ARE ACTIVE AS SUPPLIERS IN THIRD COUNTRIES .
( B ) TAKING AS THE RELEVANT MARKET THAT FOR RAW PENICILLIN AND 6-APA , IT IS CLEAR FROM THE AVAILABLE DATA , ALBEIT ESTIMATED IN SOME CASES , THAT BAYER AND GIST-BROCADES BOTH HAVE SUBSTANTIAL SHARES OF THAT MARKET , WITH THE EXPANSION OF ITS RAW PENICILLIN CAPACITY , GIST-BROCADES WILL BECOME ONE OF THE MOST IMPORTANT MANUFACTURERS IN THE WORLD , WITH ABOUT 16 % OF WORLD PRODUCTION . HOWEVER , ITS LEAD OVER THE NEXT LARGEST INDEPENDENT SUPPLIER IS NOT SO GREAT AS TO GIVE IT A DECISIVE ROLE ON THE MARKET . PFIZER , WHICH ALSO SUPPLIES THE COMMUNITY MARKET , ACCOUNTS FOR 13 % OF WORLD PRODUCTION , AND IS FOLLOWED BY SUCH IMPORTANT FIRMS AS GLAXO , BEECHAM , RHONE-POULENC , SQUIBB AND HOECHST ; INDEED BEECHAM WILL , AS A RESULT OF RECENT INVESTMENTS , VIRTUALLY DOUBLE ITS RAW PENICILLIN OUTPUT BY 1977 , AND WILL RANK MORE OR LESS EQUALLY WITH GIST-BROCADES .
AS A RESULT OF THE AGREEMENT , THE MARKET POSITION OF THE TWO FIRMS WITH REGARD TO 6-APA IS ALSO SIGNIFICANT . THE AMOUNT OF 6-APA AT GIST-BROCADES' DISPOSAL , TAKING INTO ACCOUNT THAT PRODUCED UNDER CONTRACT BY BAYER , IS ABOUT 15 % OF WORLD PRODUCTION , AND BAYER'S PRODUCTION FOR ITS OWN USE ALSO ACCOUNTS FOR ABOUT 15 % . THE WORLD'S LARGEST PRODUCER IS BEECHAM , WITH AN ESTIMATED WORLD MARKET SHARE OF 20 % , WHILE BRISTOL IS ANOTHER MANUFACTURER OF COMPARABLE IMPORTANCE . THIS ANALYSIS OF THE MARKET DOES NOT TAKE INTO ACCOUNT THE INCREASE IN THE NUMBER OF MAJOR 6-APA MANUFACTURERS WHICH MAY BE EXPECTED SHORTLY AS A RESULT OF THE RECENT DEVELOPMENT ON AN INDUSTRIAL SCALE OF THE NEW ASTRA , SNAM-PROGETTI AND ISHIMARU PROCESSES .
( C ) IN CONSIDERING THE MARKET POSITIONS OF THE FIRMS CONCERNED THE COMMISSION HAS ALSO TAKEN INTO ACCOUNT THE FACT THAT RAW PENICILLIN IS NOT ONLY THE ESSENTIAL RAW MATERIAL FOR THE MANUFACTURE OF 6-APA BUT THAT IT CAN ALSO BE USED IN THE PRODUCTION OF BOTH THE STERILE PENICILLIN SALTS G AND V AND THE INTERMEDIARY PRODUCTS 7-ADCA AND 7-ACA ON WHICH GIST'S CEPHALOSPORIN PRODUCTION IS BASED . HOWEVER , OTHER MANUFACTURERS , WHO DO NOT THEMSELVES PRODUCE PENICILLIN , MAKE CEPHALOSPORIN SPECIALITIES ON THE BASIS OF THE PRIMARY ELEMENT , CEPHALOSPORIN C . THE IMPORTANCE OF THESE PRODUCTS IN RELATION TO THE PENICILLIN SPECIALITIES IS INCREASING . IT IS CLEAR , THEREFORE , THAT THESE PRODUCERS INFLUENCE THE MARKET IN PRIMARY AND INTERMEDIARY PENICILLIN PRODUCTS . IN THEIR MARKETING OF RAW PENICILLIN AND 6-APA , GIST AND BAYER HAVE TO TAKE THESE MANUFACTURERS INTO ACCOUNT .
( D ) FINALLY THE COMMISSION TAKES THE VIEW THAT PRODUCTION SPECIALIZATION DOES NOT IN THIS CASE HAVE THE RESULT THAT THE FIRMS CONCERNED , BY EXTENDING THE RANGE OF THEIR RESPECTIVE PRODUCTS , SELL THE SAME PRODUCTS AT THE SAME OR SIMILAR PRICES , OR THAT THEY RESTRICT THEIR ACTIVITIES TO SEPARATE MARKETS . IN THE CASE OF 6-APA DERIVATIVES , THE TWO FIRMS , BAYER AND PARTICULARLY GIST-BROCADES , SELL DIFFERENT PRODUCTS , BOTH IN BULK AND IN PACKAGED FORM FOR RETAIL SALE , WHILE BOTH FIRMS HAVE DIFFERENT SALES POLICIES IN RELATION TO 6-APA . BAYER PROCESSES MOST OF ITS 6-APA PRODUCTION INTO SPECIALITIES , WHEREAS GIST-BROCADES SUPPLIES THE GREATER PART OF ITS 6-APA TO ENTIRELY INDEPENDENT PROCESSING FIRMS .
THE PARTIES IN THIS CASE ARE ACCORDINGLY NOT IN A POSITION TO ELIMINATE COMPETITION IN RESPECT OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION .
5 . IN ACCORDANCE WITH ARTICLE 8 ( 2 ) OF REGULATION N 17 , THE COMMISSION HAS A DUTY TO ENSURE THAT THE REQUIREMENTS OF ARTICLE 85 ( 3 ) CONTINUE TO BE SATISFIED .
TO ENABLE THE COMMISSION TO OBSERVE THE PRACTIAL EFFECTS OF THIS SPECIALIZED COLLABORATION , IN PARTICULAR AS REGARDS THE MARKET POSITION OF THIRD PARTIES , EACH PARTY WILL BE REQUIRED TO PROVIDE THE COMMISSION EACH YEAR WITH DETAILS OF ALL INVESTMENTS , PRODUCTION AND SUPPLIES TO THE OTHER PARTY AND TO THIRD PARTIES , TOGETHER WITH DETAILS OF THE AVERAGE PRICES CHARGED .
THE COMMISSION MUST , FURTHERMORE , ENSURE THAT COMPETITION BETWEEN THE TWO FIRMS AND BETWEEN EITHER OF THEM AND OTHER COMPETITORS IS NOT AFFECTED BY ANY FACTOR EXTRANEOUS TO THE PRESENT DECISION . SUCH RESTRICTIONS COULD IN PARTICULAR ARISE FROM INTERLOCKING SHAREHOLDINGS OR DIRECTORATES OR JOINT OR RECIPROCAL PARTICIPATION , IRRESPECTIVE OF WHETHER ALL THE FIRMS CONCERNED BELONGED TO THE BAYER AND GIST-BROCADES GROUPS OR WHETHER SOME OF THEM BELONGED TO ONE OF THOSE GROUPS WHILE THE OTHERS WERE ACTUAL OR POTENTIAL COMPETITORS . THIS NOT ONLY APPLIES PARTICULARLY TO THOSE PRODUCTS WHICH ARE THE IMMEDIATE CONCERN OF THESE PROCEEDINGS , NANEMLY RAW PENICILLIN AND 6-APA , BUT ALSO GENERALLY TO PRODUCTS WHICH ARE COMPARABLE WITH THE INTERMEDIATE PRODUCT 6-APA IN THAT THEY ARE OR CAN BE MANUFACTURED FROM RAW PENICILLIN ( 7-ADCA AND 7-ACA ) .
IN ORDER TO ENABLE THE COMMISSION TO ACHIEVE THIS OBJECTIVE THE TWO FIRMS SHOULD BE REQUIRED TO PROVIDE ADVANCE INFORMATION OF ANY SUCH POTENTIAL RESTRICTIONS .
IV
DURATION OF THE EXEMPTION
ACCORDINGLY , THE AGREEMENTS AS NOTIFIED AND AMENDED CAN , SUBJECT TO CERTAIN OBLIGATIONS , QUALIFY FOR EXEMPTION . IN ACCORDANCE WITH ARTICLE 6 ( 1 ) OF REGULATION N 17 , THE EXEMPTION WILL TAKE EFFECT FROM 5 JUNE 1975 , THE DATE ON WHICH THE TWO FIRMS ADAPTED THEIR AGREEMENTS TO SATISFY THE TESTS OF ARTICLE 85 ( 3 ) . IN DETERMINING THE DURATION OF THE EXEMPTION AS PROVIDED BY ARTICLE 8 OF REGULATION N 17 , ACCOUNT MUST BE TAKEN , HAVING REGARD TO THE CONSIDERABLE INVESTMENT BY THE TWO FIRMS WITH A VIEW TO THEIR SPECIALIZATION , OF THE NEED TO ALLOW THEM A SUFFICIENTLY LONG PERIOD FOR THE REALIZATION OF THEIR OBJECTIVES . NEVERTHELESS , THE MARKET POSITION OF THE TWO FIRMS , THE STRUCTURE OF THE MARKET ITSELF AND TECHNICAL PROGRESS REQUIRE THAT THE AGREEMENTS BE REVIEWED WITHIN A REASONABLE TIME . IT APPEARS APPROPRIATE THEREFORE TO GRANT THE EXEMPTION FOR A PERIOD OF EIGHT YEARS ,
HAS ADOPTED THIS DECISION :
§ ARTICLE 1
ARTICLE 1
PURSUANT TO ARTICLE 85 ( 3 ) OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY , ARTICLE 85 ( 1 ) THEREOF IS DECLARED INAPPLICABLE TO THE AGREEMENTS RELATING TO THE MANUFACTURE AND DISTRIBUTION OF RAW PENICILLIN AND 6-AMINOPENICILLANIC ACID , MADE ON 7 MAY 1969 AND AMENDED ON 14 MARCH 1973 AND 5 JUNE 1975 , BETWEEN BAYER AG , LEVERKUSEN , AND GIST-BROCADES NV , DELFT .
§ ARTICLE 2
ARTICLE 2
THE FOLLOWING OBLIGATIONS ARE ATTACHED TO THIS DECISION :
1 . EACH OF THE TWO UNDERTAKINGS CONCERNED SHALL FORTHWITH INFORM THE COMMISSION OF ANY CHANGE OR ADDITION TO THE AGREEMENTS SPECIFIED IN ARTICLE 1 , EVEN WHERE SUCH CHANGES OR ADDITIONS ARE THE RESULT OF ARBITRATION PROCEEDINGS .
2 . WITH REGARD TO RAW PENICILLIN AND 6-APA , THE TWO UNDERTAKINGS SHALL EACH YEAR , BY 30 JUNE AT THE LATEST , INFORM THE COMMISSION OF :
( A ) ALL LICENSES ISSUED TO EACH OTHER PURSUANT TO THE AGREEMENTS , AND OF THE TERMS OF SUCH LICENSES ;
( B ) ALL INVESTMENTS , EXISTING CAPACITIES AND ACTUAL PRODUCTION FIGURES ;
( C ) THE QUANTITIES PROCESSED BY THEMSELVES , THOSE SUPPLIED TO EACH OTHER AND THE QUANTITIES SOLD TO ANY OTHER UNDERTAKING ;
( D ) THE YEARLY AVERAGE PRICES CHARGED ON SUPPLIES TO EACH OTHER AND TO OTHER UNDERTAKINGS ;
( E ) THE WHOLESALE PRICES CHARGED TO PHARMACIES ON SALES OF SEMISYNTHETIC PENICILLIN SPECIALITIES , INCLUDING LIST PRICES AND ANY REBATES .
3 . EACH OF THE TWO UNDERTAKINGS CONCERNED SHALL FORTHWITH INFORM THE COMMISSION OF ANY OF THE FOLLOWING FORMS OF LINK BETWEEN ITSELF AND THE OTHER UNDERTAKING OR BETWEEN ITSELF AND ANY OTHER UNDERTAKING :
( A ) ACQUISITION OF A HOLDING OF 25 % OR MORE IN THE CAPITAL OF AN UNDERTAKING ;
( B ) COMMON DIRECTORS OR MANAGERS ,
( C ) FORMATION OR ACQUISITION OF JOINT SUBSIDIARIES .
THIS OBLIGATION APPLIES TO ALL UNDERTAKINGS WHICH DIRECTLY OR INDIRECTLY MANUFACTURE , PROCESS OR SELL PENICILLIN OR CEPHALOSPORINS .
§ ARTICLE 3
ARTICLE 3
§ ARTICLE 1
ARTICLE 1 OF THIS DECISION SHALL TAKE EFFECT FROM 5 JUNE 1975 AND SHALL REMAIN IN FORCE UNTIL 31 DECEMBER 1983 .
THIS DECISION IS ADDRESSED TO BAYER AG , BAYERWERK , D 509 LEVERKUSEN , GERMANY , AND TO GIST-BROCADES NV , WATERINGSEWEG , DELFT , NETHERLANDS .
DONE AT BRUSSELS , 15 DECEMBER 1975 .
FOR THE COMMISSION
A . BORSCHETTE
MEMBER OF THE COMMISSION
Metadata
- Type
- Afgørelse
- År
- 1976
- Ikrafttrædelsesdato
- 1. januar 1970