, WERE CUT BY 15 % IN 1971 AND BY 10 % IN 1974 . AS FOR THE PRICES OF OTHER SEMISYNTHETIC PENICILLINS , SOME ROSE SLIGHTLY AND OTHERS FELL . THE PRICES OF PENICILLIN G AND V HAVE REMAINED MORE OR LESS CONSTANT OVER THE LAST TEN YEARS .
7 . THE ESSENTIAL CONTENTS OF THE NOTIFICATION HAVE BEEN PUBLISHED PURSUANT TO ARTICLE 19 ( 3 ) OF REGULATION N 17 , BUT THE COMMISSION HAS RECEIVED NO COMMENTS FROM THIRD PARTIES .
II
APPLICABILITY OF ARTICLE 85 ( 1 )
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