4.

Accordingly, it is appropriate first to examine the market shares of the applicant in the case of each individual vitamin. In this connexion there is agreement that the vitamin markets must be examined separately because special production installations are necessary for each vitamin and the vitamins are not mutually interchangeable. When the Commission had revealed the sales figures of the applicant's competitors it was also possible to reach agreement in the proceedings with regard to several values, as appears from the joint observations of the parties on the list of questions put by the Court of Justice. In so far as points remain in dispute, I shall examine them when dealing with each individual vitamin market. (a) So far as vitamin A is concerned I can be relatively brief. In this connexion the applicant states that the figure quoted by the Commission in the contested decision — a 47 % market share in the Community — must be regarded as correct and may be considered representative for the vears 1970 to 1974. The applicant merely considers — and this relates to all the vitamins to be discussed — that the Commission should not have disregarded the fact that in sections of the market — the applicant quoted figures for Denmark and Belgium and for the years 1971 to 1974 — in some cases considerable variations could be seen. It is difficult — this applies to all vitamins equally — to regard this point as important, not only in those cases in which, as in the case of vitamins B3 and B6, only an increase in the market shares in the above-mentioned areas can be established. On the one hand the causes of the variations are not explained; it is above all possible, that they are attributable to a certain market strategy. However, even if it is assumed that the variations are the expression of competition on the market, the finding in the above-mentioned judgment in the banana case is important: it states that even the existence of competition in sections of the market does not preclude the assumption that the undertaking is in a dominant position if — in this connexion the stabilizing of the market share in relation to the whole of the Common Market is an indication — it appears that the undertaking in question was able successfully to resist the efforts of any competitors. It can accordingly be stated with regard to vitamin A that the share of the market is of a size material for the purposes of Article 86 and that it must be regarded as an indication of the existence of a dominant position. (b) The situation in the case of vitamin B, is also fairly straightforward. According to the information contained in the joint observations the applicant's market shares between 1972 and 1974 — when the quantities sold are used as the starting-point — were between 74.8 % and 84.5 % and — when the value of supplies is used as the basis — between 80.6 % and 87 %. On the other hand, the applicant considers that for 1971 a share of approximately 70 % at most is correct. We can certainly rely upon these values, which are surely also of sufficient size. In fact it is impossible to see any valid objections to the figures quoted. This applies first to the reference made by the applicant to the share of Roche on the world market which is allegedly smaller. Naturally, this cannot prove by itself that the figures established by the Commission in the first place are, as the applicant considers, excessive. This also applies to the applicant's reference to fermentation installations, apparently situated principally in the USA, which have been closed down and which are expected to be put into operation again when prices rise. In the calculation of market shares the determining factor is obviously only what reaches the market and not potential competition. Such competition must be examined only in another connexion. (c) The picture is very similar in the case of vitamin B6. According to the information contained in the joint observations the market shares of the applicant in the years 1972 to 1974, calculated on the basis of the quantities sold, were between 84.2 % and 88.4 %. We can also adhere to these figures since the applicant, in support of its view that lower values are relevant, was able solely to refer to its submissions as to the size of its share on the world market. On the other hand, for the previous period it may be considered correct that, as the applicant has estimated, its share was approximately 68 %. Even taking this figure as the starting-point, if we are guided by the values which can be deduced from the case-law of this Court and from national practice, it is still a very large share which is definitelymaterial with regard to market domination within the sense of Article 86. (d) The parties agree, so far as vitamin H (biotin) is concerned, that until 1970 the applicant had a complete monopoly and that its market share until 1974 fell to 93 %. It is merely doubtful in this respect — quite apart from the importance of the marketing stage which must be considered later on — whether importance can be attached to the fact that this product, as the applicant has maintained, can be replaced by other products in the fermentation industry. In this connexion — I shall in principle have to deal with the problem of interchangeability later on in the case of vitamins C and E — it seems to me in principle that the Commission's objection that the applicant's information is too imprecise and in particular, as regards the extent of the interchangeability, which the Commission disputes, has not been proved beyond doubt, is justified. Finally, a deeper examination of this question may be dispensed with at present simply because even if the values quoted by the applicant are accepted — it considers that its market share is thus reduced by approximately 15 % — there would still remain an extremely large share of the market which is quite comparable to the values quoted hitherto and therefore material for the purposes of Article 86. (e) In the case of vitamin C the calculation of the market share presents no difficulties in so far as both parties assume that, taking only the vitamin into consideration, the applicant had a share of between 63 % and 64.4 % from 1972 to 1974, calculated by quantity or a share of between 64.8 % and 66.2 %, on the basis of the sales values. The applicant's shares for 1970 and 1971 are said to have been 1 % or 2 % lower, according to its statements, but this obviously makes no difference to the material size. The problem in this connexion is, however, as I have already indicated, that of how it is necessary to regard the competition from substitute products claimed by the applicant. In this respect, it stated that vitamin C is to a considerable extent — the applicant assumes that 30 % of its sales are involved (it was unable to quote precise values) — put to technological uses, in other words used not on account of its biological and nutritional properties but on account of its chemical and physical properties, in particular as a so-called antioxidant. In this role it can be replaced by other products. If this is however included in the relevant market — in this respect also the applicant relies upon estimates — its share in relation to 1974 falls to 46 % to 47 %. So far as this -special problem is concerned, it is possible to leave undecided the question whether the applicant in fact, as the Commission considers, bases its argument on excessive figures and whether for that reason alone it is necessary to correct its calculations. As the Court is aware, in this respect the Commission has in mind the substitute product of citric acid which has a large (60 %) share in the applicant's calculations. I shall merely observe in this connexion that although citric acid is not regarded as an antioxidant in Community Directives Nos 70/357 and 70/524, which were already in force at that time, it might however be taken into consideration in this respect because according to Directive No 70/357 it increases the antioxidant effect of other substances and can therefore in some cases replace vitamin C. In addition, it must be borne in mind that in its calculations the applicant only took into account about one quarter of the total quantity of citric acid which reaches the market. The question how the concept of ‘interchangeability’ must be interpreted in competition law is in fact very important. In this respect I am convinced that the Commission is right when it recognizes interchangeability only in cases in which, from the point of view of the buyer and of the use to which he puts a product, it is possible to state that another product satisfies the same needs. In this connexion reference can be made to the case-law of the American Supreme Court and its concept of ‘reasonable interchangeability’; the same also applies under German competition law, as follows from the above-mentioned decision of the Bundesgerichtshof of 3 July 1976 and from the observations contained therein on functional interchangeability from the view-point of consumers. In my view it is however extremely doubtful whether it is possible to speak of such interchangeability in relation to vitamin C and other antioxidants. This is in fact only partial interchangeability, since in the case of vitamin consumers who envisage using them for biological and nutritional purposes there is obviously no question of replacing them by other antioxidants. In such circumstances — in this connexion the concept of limited interchangeability used in the judgment in the banana case may also be borne in mind — it certainly does not seem justifiable to define the market in the way which the applicant considers correct and to ascertain its share thereof accordingly, in other words after the inclusion of pure antioxidants. At most, it might be possible to envisage leaving out of consideration the proportion of vitamin C which might possibly be used for technological purposes — although its use cannot be precisely checked and its intended purpose can be changed at will. If one does this, however, the result is scarcely any alteration in the market shares in the sense claimed by the applicant. In fact, and in this it is necessary to agree with the Commission, it must be assumed that the applicant's competitors — clarification of this point is evidently extremely difficult — also supply a corresponding proportion of their sales for such intended uses. This is also indicated not least by the applicant's submission in Annex 3 to the joint observations on the questions put by the Court of Justice; it is stated therein that the stated proportion (30 % of the sales of vitamins is said to be intended for technological use) is representative of the total sales of vitamin C in the Community. Finally, reference might also be made to the fact that even if the applicant's arguments with regard to the problem of interchangeability were accepted and all the estimates which it has quoted were considered as correct, a market share would still remain which, compared with the sizes given in the judgment in the banana case, would have to be described as definitely material for the purposes of Article 86. The only question which would arise would then be — and it must in any case be examined later on — whether the additional inquiries made by the Commission are sufficient to enable it to speak of a dominant position occupied by the applicant on this market, and whether supplementary considerations put forward by the applicant could cast doubts on a provisional judgment of that kind. (f) In the case of vitamin E, in which the same problem arises, the applicant's market share, leaving out of account competition from substitute products, amounts, according to the uncontested information supplied by the Commission, to 50 % to 60 % in the years 1972 to 1974, if the quantities sold are used as the starting-point, and 54 % to 64 % on the basis of the value of sales. According to the information supplied by the applicant for 1970 and 1971 the market share was approximately seven points lower than for 1972; it is therefore necessary to assume a 43 % share if the share is calculated by quantity and a 47 % share if calculated by value. If one concurred on this point with the applicant's view as to the interchangeability with other products and if one accepted the calculations in this respect — 60 % of sales are said to be intended for technological use — provided that the quantities assumed by the applicant in this connexion are right, the market share for 1973 and 1974 would in fact still not fall outside the order of magnitude which has already been quoted repeatedly, since a reduction of 14 %, as the applicant considers correct, would still leave a market share of between 40 % and 44 % for 1974 and between 46 % and 50 % for 1973. With regard to the previous period that would, however, hardly apply since for 1972 shares of only 36 % or 40 % and for the previous years a share of 29 % or 33 % would result. Nevertheless, what has been stated with regard to interchangeability in the case of vitamin C also applies in this connexion. In addition, the deduction by the applicant that because the vitamin E content required by the law on animal feeding-stuffs is already covered by the natural content of mixed feeding-stuffs it must be assumed that at the most 20 % of the added vitamin E is for biological and nutritional purposes and that therefore 80 % is used on account of the antioxidant effect which could also be obtained by other substances, seems unconvincing. Moreover, the Commission was able rightly to refer to publications of the applicant according to which it is more advantageous for customers to employ vitamin E instead of other antioxidants as vitamin E also has other properties which indicate its use in livestock breeding. If it is however, as in the case of vitamin C, considered permissible if need be to leave out of account sales of vitamin E for technological uses, the picture of the market share drawn by the Commission would not change fundamentally in this respect either. Indeed, the fact that a corresponding proportion of the sales of the applicant's competitors is likewise intended for technological uses also applies to vitamin E — this may be deduced from the above-mentioned observations submitted by the applicant. It can therefore also be stated in the case of vitamin E that the applicant possessed a market share during the whole period of interest in this connexion of such a size that it is, there is no doubt, material for the purposes of Article 86. (g) With regard to the market in vitamin B3 a market share of a size material for the purposes of Article 86, according to the information provided by the parties in the joint overservations, is shown only for 1974, in which year the applicant's share is said to have amounted to 41.2 % if it is calculated by quantity and to 51 % if calculated by value. On the other hand, lower figures were quoted for the previous years: 23.4 % or 34.9 % for 1973 and 18.9 % or 28.9 % for 1972; in addition, the applicant's market share in 1970 and 1971 is once more said to have been six points lower. On the other hand the calculation of the market share, in so far as it is based upon the value of sales, is, in contrast to the case of the other vitamins, considerably higher than that based upon quantities sold. The conclusion may be drawn from this information that it is possible to speak of an indication that there was a dominant position on the market only with regard to 1974 and that even this seems doubtful if one adheres to the calculation based on quantities sold and if that calculation should still be corrected, as the applicant considers right. So far as this issue is concerned, the Commission takes the view that the calculation according to the value of sales is more reliable because vitamins are sold in different concentrations and for that reason, as shown precisely by imports from Switzerland, there exist very considerable differences in price. On the other hand, the applicant favours the authority of the calculation according to quantities sold, as it claims that when the calculation is made according to the value of sales the picture is distorted in that in the case of its sales final selling prices are taken as the basis whereas in the case of imports duty-free import prices which are 30 % less than the final selling prices are taken as the basis. In addition, it considers with regard to the calculations according to quantities sold made by the Commission that the fact that some of the imports cannot be ascribed to the applicant and that in some cases supplies from Switzerland were movements within the group of companies of goods which did not reach the market has wrongly been left out of account. In my opinion the calculation based on the quantities sold should in principle be preferred. It seems to me that better comparability exists in this case — the conversion of goods with different degrees of concentration should not present any inordinate difficulties — and the Bundesgerichtshof, as may be deduced from both the above-mentioned decisions, also seems to have proceeded primarily in that way. I have doubts, however, as to whether it is really necessary to make substantial corrections to the Commission's calculations based on the quantities sold. There is at most reason to do so in so far as 10 tonnes of the imports from Switzerland were allegedly wrongly attributed to the applicant. To the extent to which the applicant claims that the Commission also wrongly brought into account 23 tonnes of shipments purely internal to the Roche group, reference may certainly be made in this respect to Annex 1 to the joint observations of the parties on the questions put by the Court of Justice, from which it appears that imports from Switzerland were attributed to Roche and were therefore no longer taken into consideration under the heading ‘Imports’ which is important with regard to the calculation of the shares of the market. This point, which also remained in dispute at the hearing, does not, however, ultimately need to be examined more deeply and it is also possible to leave undecided the question whether the reduction made in Annex 2 to the joint observations in the case of 45 % goods, which was considered necessary for the conversion into 100 % goods, is sufficient for the purpose of correcting the import figures. Even if it is accepted that the calculation on the basis of the quantities sold provides an indication of the existence of a dominant position in relation to 1974, this should be irrelevant in the present case merely for the reason that the supply agreements, as we have heard, came into being in 1973 at the latest, in other words at a time at which the applicant did not yet have a dominant position on the market in vitamin B3 and because immediately after the first visit by officials of the Commission in the autumn of 1974 the applicant did everything necessary to terminate the agreements. In the light of these facts it is indeed possible to say, with regard to the market in vitamin B3, that it was wrongly taken into consideration in the contested decision for the application of Article 86.