COMMON MARKET ARE PROHIBITED AS INCOMPATIBLE WITH THE COMMON MARKET .
A . PREVENTION , RESTRICTION OR DISTORTION OF COMPETITION
15 . PRIOR TO THE SIGNING OF THE AGREEMENT OF 25 MARCH 1970 NEITHER ASSOCIATED ELECTRICAL INDUSTRIES LTD NOR REYROLLE PARSONS LTD WERE MANUFACTURING VACUUM INTERRUPTERS . HOWEVER , THEIR EXPERIENCE IN THE FIELD OF HEAVY ELECTRICAL EQUIPMENT AND THEIR ABILITY TO MANUFACTURE COMPONENTS THEREFOR , THE EXTENT AND QUALITY OF THEIR RESEARCH AND DEVELOPMENT WORK , SOME OF WHICH WAS CONCENTRATED IN THE FIELD OF VACUUM INTERRUPTERS , THEIR SKILL IN PRODUCING ELECTRICAL EQUIPMENT GENERALLY AND THE NATURAL GROWTH OF THEIR ACTIVITIES IN THE FIELD OF MANUFACTURE OF ELECTRICAL EQUIPMENT MIGHT WELL HAVE LED THEM TO EXTEND THEIR RANGE OF PRODUCTS TO INCLUDE VACUUM INTERRUPTERS , THEREBY MAKING THEM DIRECT COMPETITORS IN THE RELEVANT PRODUCT MARKET . THEY MUST THEREFORE BE ASSUMED TO BE POTENTIAL COMPETITORS AND THE AGREEMENT OF 25 MARCH 1970 TO HAVE BEEN CONCLUDED BETWEEN POTENTIALLY COMPETING MANUFACTURERS .
16 . THE OBJECT AND EFFECT OF THE AGREEMENT IS TO RESTRICT COMPETITION WITHIN THE COMMON MARKET . THERE IS NOT AT PRESENT EVEN ONE MANUFACTURER OF COMPONENTS FOR ELECTRICAL EQUIPMENT WITHIN THE AREA OF THE COMMON MARKET WHICH MAKES AND SELLS VACUUM INTERRUPTERS . WHEN TWO COMPANIES , EACH OF WHICH IS A POTENTIAL MANUFACTURER AND WHICH ARE EACH WITHIN THE COMMON MARKET , MERGE THEIR ACTIVITY IN THE FIELDS OF RESEARCH , DEVELOPMENT , MANUFACTURE AND SALE BY ESTABLISHING A JOINT VENTURE CONCERNED WITH THIS ONE PRODUCT ON SUCH TERMS THAT THEY DEPRIVE THEMSELVES OF THE POSSIBILITY OF DEVELOPING AND SELLING THAT PRODUCT INDEPENDENTLY OF , AND IN COMPETITION WITH EACH OTHER , THERE IS A RESTRICTION OF COMPETITION .
B . EFFECT ON TRADE BETWEEN MEMBER STATES
17 . BOTH ASSOCIATED ELECTRICAL INDUSTRIES LTD AND REYROLLE PARSONS LTD ARE MAJOR MANUFACTURERS OF SWITCHGEAR APPARATUS IN THE UNITED KINGDOM . IT IS REASONABLE TO ASSUME THAT IF A MARKET WERE TO DEVELOP IN THE OTHER MEMBER STATES OF THE EEC FOR THE VACUUM INTERRUPTER AND IF BOTH ASSOCIATED ELECTRICAL INDUSTRIES LTD AND/OR THEIR ASSOCIATED COMPANIES AND REYROLLE PARSONS LTD HAD DEVELOPED AND MANUFACTURED THE VACUUM TYPE INTERRUPTER INDEPENDENTLY OF EACH OTHER , EACH SHOULD HAVE BEEN ABLE TO OBTAIN A MARKET FOR IT IN THE OTHER MEMBER STATES , WHERE THEY WOULD HAVE BEEN IN DIRECT COMPETITION NOT ONLY WITH EACH OTHER BUT ALSO WITH SUCH OTHER UNDERTAKINGS AS MIGHT MANUFACTURE THIS TYPE OF INTERRUPTER . THERE COULD HAVE DEVELOPED AN EXPORT TRADE BETWEEN EACH OF THESE UNDERTAKINGS IN THE UNITED KINGDOM AND CUSTOMERS IN OTHER MEMBER STATES IN WHICH EACH WOULD HAVE BEEN IN COMPETITION WITH THE OTHER AND WITH LOCAL MANUFACTURES . EXPORTS FROM THE UK TO OTHER MEMBER STATES ARE NOW LIKELY TO START EARLIER AND FORM A DIFFERENT PATTERN , THUS AFFECTING THE FLOW OF TRADE FROM THE UNITED KINGDOM TO OTHER MEMBER STATES . FURTHER , BOTH ASSOCIATED ELECTRICAL INDUSTRIES LTD AND REYROLLE PARSONS LTD HAVE AS CUSTOMERS IN THE