In its Decision of 14 December 1972 the Commission states:

The Commission draws the conclusion from these points that CSC controls Istituto and exercises its control in fact at least with respect to Istituto's relations with Zoja. Therefore there is no ground for distinguishing between the will and acts of CSC and those of Istituto. Regarding their relations with Zoja the Commission considers them as constituting one economic entity.

CSC and Istituto both submit that the facts alleged by the Commission, even if they were correct, are inconclusive. According to the Court's ruling in cases 48/69, 52/69 and 53/69 (Rec. 1972, p. 619, 787 and 845), in order for a parent and a subsidiary to be deemed a single economic unit, so that the acts of the subsidiary may be attributed to the parent company, there must be (a) power of the parent company to direct the subsidiary and (b) the actual exercise of the parent's control to such an extent that the subsidiary does not determine its behaviour on the market in an autonomous manner.

The facts alleged by the Commission do not constitute any evidence in favour of such a type of control. Under Istituto's Articles of Association the two Consiglieri-Delegati, Dr C. Vittadini and Eng. G. V. Vittadini still have full power to direct the company, except in relation to investments. Neither in the Board of Directors nor in the executive Committee does CSC have majority representation. Only in matters of investment can CSC exercise a blocking vote. According to a certificate of Arthur Young & Company, Milan, submitted as evidence by the applicants, more than 75 % of Istituto's turnover is derived from the sale of products neither produced by CSC nor based on raw materials supplied by CSC.

The Commission has failed to point out a single instance where Istituto's behaviour on the market resulted from instructions given to it by CSC. Neither the fact that in its annual reports to stockholders CSC calls Istituto its subsidiary (for United States accounting and securities law reasons), nor the fact that Istituto conducts some research also for the benefit of CSC, affect the determination of the question whether or not Istituto autonomously decides its own market behaviour. The Commission's reference to Article 2359, para. 2, of the Italian Civil Code is not relevant in this context, as this article prohibits cross shareholdings between a parent and a controlled subsidiary company for the protection of the parent's creditors. It follows that the term controlled in Article 2359, para. 2, has nothing to do with the question of control of market behaviour which is, according to the judgments of the Court cited above, the factor which determines economic unity.

CSC deduces from the foregoing argument that no economic unity between Istituto and CSC exists and that its only connexion with the Common Market in this case is that it once sold nitropropane and aminobutanol into the EEC and later made the policy decision to discontinue such sales. Therefore it could not have acted with respect to the present matters within the EEC either by itself or through Istituto.

Istituto, also concludes that there exists no dependence on CSC with respect to its market behaviour. Even on the hypotheses — expressly rejected by both applicants — that Istituto is a dependent subsidiary of CSC and that its behaviour on the market is to be imputed to the latter, the Commission's own theory has not been consistent because if the Commission is right in alleging that CSC dictated Istituto's conduct, then the latter cannot be considered as liable for the former's decisions. In that case the Decision in issue is wrongly addressed.

The Commission, in its defence, puts the relevant question as follows:

Does the fact that CSC owns 51 per cent of the Istituto voting stock (as is admitted by CSC) taken together with the other applicable facts mentioned in the Decision (likewise not contested by CSC) mean that Istituto is under the control of CSC, at least as regards the behaviour in question?

As Istituto is a company incorporated under Italian law, it is essential to consider the rights and powers which Italian company law accords those who hold the majority of the voting stock of a company limited by shares (società per azioni — Spa). Istituto's documents of incorporation do not derogate from the relevant provisions of Italian company law. It follows from these provisions that the ownership of the majority of the voting stock brings with it the right to manage a company (Article 2368 of the Italian Civil Code), both in a positive way by nominating the managers — amministratori — (Articles 2364 and 2383) and negatively, by preventing their replacement as well as by having them held liable for breach of duty (Article 2393).

In support of its opinion the Commission refers to Italian academic writing on this subject (Pasteris, il Controllo nelle società collegate e le partecipazioni reciproche, Milan, 1957, Chapters IX and X), to the relevant provisions in the company law of Member States (in Germany, Article 16 (1) of the Aktiengesetz of 1965, in France, Loi No 66-537, Article 354 and in the United Kingdom, Companies Act, 1948, sect. 154) and to the Proposal for a Council Regulation embodying a Statute for a European Company, Article 6 and 223.

The Commission considers that under competition law it is possible to go even further into the complex of legal and factual in order to discover the economic reality of control than is possible under company law. Here Article 23 of the German Gesetz gegen Wettbewerbsbeschrankungen is a good example.

The fact that one company holds a majority of the voting stock of another is by itself sufficient proof under Community competition law, that it controls the latter. The presence on the Board of Directors and in the Executive Committee of nominees of CSC, indicates that the power of control has in fact been exercised in the present case as was set out in the Decision. In this respect it is significant that the President of CSC who is also Chairman of Istituto's Board of Directors, has the casting vote. Therefore CSC also has a majority in the executive organ of Istituto.

The Commission refers once again to its Decision in stating that it considers CSC and Istituto as one economic unit for the purposes of applying Article 86 with regard to their relationships with Zoja. As regards this relationship CSC's control of Istituto is evident: first, the decision to transform Istituto from a distributor of ethambutol to a producer of this product is a type of decision implying investments — for which CSC has a blocking vote — ; secondly, it results from the certificate of Arthur Young & Company referred to by CSC that ethambutol produced by Istituto is a part of the products manufactured in Italy under the permission of CSC.

Even if it were admitted that Istituto enjoyed a position independent of CSC, this would in no way affect the jurisdiction of the Commission, for the conduct of CSC in question produces effects in the territory of the Common Market which are direct and immediate, reasonably foreseeable and substantial. According to the ruling of the Court in the Béguelin Case,22/71, (Rec. 1971, p. 949), the fact that an undertaking is situated in a third country does not constitute an obstacle to the application of the Community's competition rules where the behaviour produces effects within the Common Market. The Commission refers also to the Advocate-General's opinion in the Dyestuffs Cases, 48/69 a.o. (Rec. 1972, P. 619).

CSC and Istituto reject the argument of the Commission. In particular they allege that the defendant has altered its position in stating that CSC and Istituto form an economic unit solely with regard to their relationship with Zoja. This constitutes an impermissible alteration of the subject of the litigation.

According to the Court's judgments in the Dyestuffs Cases the only applicable criterion is the complete dependence of Istituto on CSC in determining its behaviour on the market. The same criterion was applied by the Commission itself in its Decision No IV/22-548 Christiani et Nielsen (OJ L 165, 15.7.1969, p. 12).

The applicants reject once again the argument of the Commission that CSC's holding of 51 % of the voting stock allows it to control the management of Istituto. This opinion is inconsistent with the Commission's Statement in its Proposal to the Council of Ministers concerning a fifth Directive on the harmonization of Company Law (COM (72) 887 of 27 September 1972) with respect to the powers of the general meeting. The importance attached to Italian civil law by the Commission is hardly comprehensible, as the provisions cited have nothing to do with questions regarding control of market behaviour. The references made to German, French and English law are equally inconclusive for the questions here relevant. It is not permissible to refer to the Draft Statute for a European Company, as it does not reflect the existing law in EEC Member States and its final adoption as Community law is still doubtful.

As to the alleged domination of CSC in Istituto's management, the applicants repeat their position that neither in the Board of Directors nor in the Executive Committee does CSC have a majority. The fact that the Chairman of the Board of Directors — currently a CSC executive — has a casting vote is virtually of no consequence, for up to now the president's casting vote has never been used.

It is stressed by CSC and Istituto that CSC cannot direct the latter's investments, as CSC, through its representation in the Board of Directors and the Executive Committee, has only the power to veto investments, not to command them. CSC has never used this veto power. The only part CSC played in the behaviour of Istituto regarding the production of bulk ethambutol and specialities derived from it (mycobutol) was that it did not veto the investments needed. The Commission's allegation that CSC caused Istituto to produce ethambutol is wrong: it was Istituto's decision. The reference of the Commission to the certificate of Arthur Young & Company, according to which ethambutol is produced under the permission of CSC is inconclusive. This clause means no more than that the two enterprises agreed that CSC would supply Istituto with an intermediate product for the manufacture of ethambutol. At the request of the applicants Arthur Young & Company issued a new statement which leaves no room for misinterpretation.

CSC and Istituto emphasize that there exists no relationship at all between Istituto's decision to start the manufacture of ethambutol and CSC's refusal to supply Zoja with aminobutanol: Zoja unilaterally terminated the relations with Istituto and when, six months later, Istituto applied to CSC for a supply of aminobutanol for resale, CSC refused for technical and commercial reasons.

CSC gives an extensive account of the effects doctrine in relation to public international law, in answer to the Commission's observation on the effects of CSC's conduct within the Common Market. Its main conclusions are:

The Commission in its rejoinder rejects the allegation of an alteration of the subject of the litigation. It refers once again to the Decision, which indicates unmistakably that the Commission considered CSC and Istituto as one economic unit especially as regards their relations with Zoja. In the present case the two criteria developed by the Court in the Dye-Stuffs Cases had been entirely satisfied:

In its Christiani & Nielsen Decision the Commission considered that it was impossible for a wholly owned subsidiary to act autonomously. It does not follow that the Commission must consider any subsidiary in which the parent company holds less than 100 per cent of the capital as being autonomous. The applicants' assertions regarding relevant Italian Civil Law (Article 2359 and 2362) are inconclusive because they do not refute the Commission's position that in every case where Italian legislation attaches legal consequences to the control of one company by another, control is assumed to exist when one company holds the majority of the voting stock of another company. The Commission reaffirms on the relevance of the quoted provisions of the company law of other Member States and of the proposal for a Statute for a European Company. With respect to the applicant's assertions on the management of the CSC-Istituto Group the Commission does not consider important the fact that the Chairman has never used his casting vote; the mere position of having such a vote matters in determining the power relations within the group. The Commission considers that the distinction between veto power and the power to command investments is scholastic and irrelevant.

The defendant rejects expressly the contentions that during the present proceedings it has changed the reasons on which it bases the existence of the CSC-Istituto Group. Neither in maintaining that CSC and Istituto constitute one economic unity, at least in their relations with Zoja, nor in stating that the Chairman of the Board of Management has a casting vote, has the Commission changed its original view as reflected in the Decision. As to the effects doctrine, the Commission remarks that the arguments of the applicants have already been put forward in the Dye-stuffs Cases. The Commission, declines to resume once again the elaborate dispute on this doctrine, maintaining that the Béguelin Case is relevant in this context.

In its Decision the Commission stated

Between applicants and the defendant there is a large measure of disagreement as to the definition of the relevant market. CSC and Istituto on the one hand assert the relevant market to be that of anti-tuberculosis drugs, the Commission on the other hand alleges, referring to its Decision, that the relevant market is that of raw materials for the production of ethambutol, i.e. that of nitropropane and aminobutanol.

In the applicants' view the definition of the relevant market must start with determining the relevant market for the end-products, i.e. ethambutol and specialities derived from it. Only in so far as ethambutol constitutes a separate market could there exist a separate market for its component.

The defendant submits in its statement of defence that Zoja was affected by CSC's refusal to provide it with aminobutanol or nitropropane, the raw materials it needed to produce ethambutol in a competitive manner. It was not enough that Zoja was able to obtain ethambutol in bulk, even from Istituto. Since the competitive position of Zoja on the market entirely depends on the technology and know-how it has acquired in processing nitropropane and/or aminobutanol into ethambutol, cutting off its supply of these raw materials might eliminate it from the market. In this respect Zoja as a buyer is entirely tied to the supplier of those materials. At this stage the relationship between CSC and Istituto on the one hand and Zoja on the other hand has to be judged in the light of Article 86.

CSC and Istituto reject this explanation, asserting that it implies a change of the position developed by the Commission in the Notice of Objections and in the Decision.

The Commission admits that in the Notice of Objections the group is found to enjoy a dominant position in a wider field than that retained in the Decision (since it extends to ethambutol), but it emphasizes that from the outset its view has been that CSC was in a dominant position first of all on the market in the raw material necessary for the manufacture of ethambutol, the market on which the abusive termination of supplies has been established. The Decision itself leaves no shadow of doubt on the point of the relevant market. (Section II B). In so far as the ethambutol market is mentioned (Section II C) this is done in order to establish the effects of the behaviour in question. CSC and Istituto submit that the Commission's allegation according to which their group had a monopoly on the world market in raw materials for the manufacture of ethambutol, is unfounded. They invoke successively

The Commission states that in the present case the buyer (Zoja) depends on the availability of nitropropane and/or aminobutanol on the market. Only in re-processing these raw materials into the end-product (ethambutol) is Zoja able to employ its technology and know-how. Consequently cutting off the supply of nitropropane and/or aminobutanol would inevitably result in Zoja's disappearing from the market. Therefore the existence of other processes for manufacturing, from other raw materials, the same end-product is in this context irrevelant. Also the possibilities of obtaining ethambutol in bulk on the market are not important. Speculations concerning the availability of such processes, of such other raw materials and/or other end-products do not alter the fact that the industrially tied buyer cannot switch to other suppliers of other raw materials, without changing the economic and industrial basis of his undertaking. The whole question can be summed up as follows: are there, besides the CSC-Istituto Group, other suppliers of nitropropane and aminobutanol who are offering these materials in sufficient quantities under reasonable conditions? It is in this light that the alternatives put forward by the applicants have to be judged.

The Commission reviews critically the other alleged sources of aminobutanol and ethambutol:

The Commission summarizes its review of the different alternatives by stating that none of them offers Zoja real commercial possibilities to overcome the cutting off of the supply of aminobutanol and/or nitropropane by the CSC-Istituto Group. Consequently the Commission's assumption that the CSC-Istituto Group has a dominant position, if not a monopoly, is entirely justified.

In its defence the Commission mentions incidentally dextro-aminobutanol as a raw material for the production of ethambutol. This is an upgraded intermediary supplied by CSC to Istituto since 1970.

The applicants declare this impermissible by way of procedure, and assert that dextro-aminobutanol is a more upgraded intermediary product for the manufacture of ethambutol and does not constitute a relevant market by itself.

The Commission, referring to the Decision, agrees on the last point with the applicants. Dextro-aminobutanol could not constitute a market by itself: it forms part of the market of raw materials for the production of ethambutol, which is dominated by the CSC-Istituto Group.

In its Decision the Commission states:

The Commission disputes the analysis made by the applicants. First, it emphasizes once again that in the Decision the ethambutol market has only been mentioned for the purpose of establishing the effects of the abusive conduct. In general, it would be hazardous to speak of interchangeability when dealing with modern drugs whose effects and specific contra-indications require the physician to make a choice dictated in each individual case by the particular clinical characteristics of his patient. In particular, in the case of ethambutol the available literature (including that referred to by the applicants) indicates that the treatment of tuberculosis often requires a combination of drugs, depending on the peculiarities of the different cases. Since most of the usual combinations of drugs mentioned in the literature contain ethambutol, the Commission thinks itself justified in qualifying it as the most frequently used anti-tuberculosis drug. This clearly does not mean that, expressed in relative quantities, ethambutol has the largest market share, but rather indicates that it is very important as a component of the anti-tuberculosis regimens.

Like the relative quantities of drugs used, the relative value of the sales, too, has a limited significance. This has to be borne in mind when interpreting the statistical data advanced by the applicants.

It follows from the previous reasoning that the various drugs for the treatment of tuberculosis are used as components of the particular regimens that are prescribed in the individual cases. So one has to assume that these drugs are complementary to each other and not interchangeable. The Commission is thus entitled to consider the ethambutol market as a separate one.

The applicants' arguments regarding rifampicine are defective in two respects. First, nowhere has it been proved that the increase in sales of this medicine is taking place at the expense of ethambutol. On the contrary the literature consulted indicates repeatedly that both drugs are frequently used as complements. Secondly, the statistics put forward by the CSC-Istituto Group only reveal that the increase in sales of rifampicine is larger than the growth of sales of ethambutol. Further it is important to know that rifampicine is also used for many purposes other than the treatment of tuberculosis. This fact limits the force of the argument even further.

In its decision the Commission points out:

CSC and Istituto submit that the market for anti-tuberculosis drugs within the EEC is a very small one, because tuberculosis has become a very rare disease. Zoja's sales within the Common Market are only a small portion of its production; most of it is exported to the world market. Moreover trade from Italy with the other Member States is blocked by patents in those States held by American Cyanamid Company. These patents have never been questioned in the Netherlands and Belgium. When they were challenged in the Federal Republic of Germany, their validity was upheld by the competent national tribunal. In France, patent litigation is pending; the Decision mentions the ruling against American Cyanamid Company by the Court of Appeal of Paris, but omits to state that this judgment is now under review by the Court of Cassation.

CSC has offered to supply Zoja with its requirements of aminobutanol to the extent necessary to enable it to participate in intra-community trade.

The Commission asserts that the very fact that Zoja has made exports to other member countries shows that effective intracommunity trade exists. Where the product in question is a medicine, which has been on the market only a few years, the amounts sold are not very large in terms of value. It is, however, not correct to argue, from the limited sales in terms of value which have been effectuated within the EEC, that trade between Member States is not being affected. Where ethambutol is used to combal a serious, but rare illness, the amounts of exports offer, as such, an insufficient criterion.

The applicants' representation of the facts with respect to the patents of American Cyanamid Company is not correct. At present Zoja, pursuant to a decision of the Court of Appeal of Paris, may legitimately export to France. The German decision mentioned by the applicants is not unfavourable to Zoja's position. The Dusseldorf Landgericht has confirmed in its judgment of 1 February 1973 that the product manufactured and sold by Zoja is not the same as that which results from the process patented by American Cyanamid Company.

Further, the Commission mentions that legal proceedings are pending in Great Britain, Korea and Japan.

The Commission does not consider relevant the fact that CSC is prepared to supply Zoja to the extent necessary for the latter's sales within the Common Market, as the offer of such a supply, made in May 1972, is subsequent to the abusive behaviour, which consisted in a total cessation of supplies. Consequently this offer does not provide a remedy for the infringement committed. The Decision by which the Commission has imposed sanctions in respect of that infringement would still be valid even if supplying Zoja for its sales in the Common Market would cause the cessation of the abuse.

The Commission concludes that, in the presence both of an existing intra-community trade in which Zoja is playing a role of protagonist, and of potential trade in the development of which Zoja is the most promising undertaking, there can be no doubt that its disappearance as a competitor would seriously prejudice this trade.

The applicants reply that the Commission's allegations with respect to the patent litigation between Zoja and American Cyanamid Company are not correct. A nullity proceeding instituted by Zoja before the German Patent Office against Cyanamid's patent was rejected in December 1971. The interlocutory decision of the Landgericht Dusseldorf, referred to by the Commission, was no more than an order to both parties to produce evidence in support of their respective theses. It gives no indication as to what the final outcome of this litigation — an infringement action, brought by Cyanamid against Zoja and Zoja's German distributor — will be. Regarding the patent situation in Great Britain, Korea and Japan, mentioned by the Commission, the applicants state, first, that the Decision in issue was given at a time when the United Kingdom was not a Member State of the EEC, secondly, that the patent situation in Korea and Japan has nothing to do with intra-community trade. These references must therefore be regarded as irrelevant. The Commission is not entitled to make conjectures about the potential development of intra-community trade in ethambutol. It has to be taken into account that pharmaceutical products are subject to constant evolution and renovation, so that such estimates can only cover a reasonably foreseeable future. As the validity of Cyanamid's patents in the EEC extends to at least 1977 (Great Britain), no prejudicial effect on intra-community trade can be assumed in the foreseeable future.

The Commission, in its rejoinder, maintains that, contrary to the applicants' opinion, Cyanamid's patents cannot block Zoja's export to Germany. In fact the application for attachment filed by Cyanamid in the Landgericht of Munich once ethambutol produced by Zoja was introduced on the German market was refused on 4 May 1971. Consequently Zoja can export to Germany. The importance of the interlocutory decision of the Landgericht of Dusseldorf is that it refused to grant Cyanamid the advantage as regards burden of proof under Section 47 (3) of the German Patent law, because the American Cyanamid product and the Zoja product do not have the same characteristics.

More generally, the applicants' conclusion that ethambutol manufactured by Zoja cannot be exported to the countries of the Common Market is not correct, because Cyanamid patents have not so far been able to block the import of Zoja's product.

The Commission only referred to the patent situation in Korea and Japan in order to give an indication of the value of Zoja's patents and hence of its competitive strength.

The applicants submit that the Commission lacks the competence to issue specific orders for delivery of products and for submitting to the Commission proposals for further supply, both sanctioned by a daily penalty for non-compliance. Competence to do this is not provided for in Regulation No 17, nor in any other regulation. It may be possible that Article 87 EEC authorizes the Council of Ministers to vest such powers in the Commission, but no measure to this effect has yet been taken.

Moreover, the Commission's order to supply 60000 kg of nitropropane or 30000 kg of aminobutanol to Zoja constitutes a misuse of its powers. The Commission's competences under Article 86 are limited to competition within the Common Market, only in so far as trade between the Member States is concerned. Its injunction to deliver 60000 kg of nitropropane or 30000 kg of aminobutanol to cover Zoja's most urgent needs is disproportionate. Although the applicants do not have detailed data concerning Zoja's sales of ethambutol in the Common Market at their disposal, they consider that the quantities required by the Commission greatly exceed the annual quantities needed by Zoja for its intra-community trade. CSC refers here again to its proposal to Zoja to supply it with the amounts of aminobutanol required for the production of ethambutol to be sold within the Common Market.

The Commission has misused its powers, therefore, by issuing injunctions which can quantitatively only be related to Zoja's requirements for the world market. This invalidates the Decision with regard to the injunction for an immediate supply in Article 2 and the daily fine in Article 4 (1), and also, unless the Commission relates the supply obligation to Zoja's needs for the Common Market only, with regard to the injuction for a longer term supply in Article 2 and the daily penalty in Article 4 (2).

The Commission refers, in its defence, to the wording of Article 3 (1) of Regulation No 17, and in particular to the following clause: it may by decision require … to bring infringement (of Articles 85 and 86) to an end. This Article, instead of summing up a list of remedies which the Commission may impose, establishes the goal to be attained by the Decisions, i.e. the end of the infringement. It follows that the extent of powers vested in the Commission can only be determined in relation to the goal laid down in Article 3. Since in the present case the behaviour which resulted in an infringement of Article 86 was that of ceasing to supply the raw material, thus risking the elimination of one of the principal manufacturers of the derived product, the necessary remedy could only be the ordering of such supplies as to guarantee the economic survival of the manufacturer in question. Hence the Commission acted within the competences laid down by Article 3.

With respect to the question of the proportionality of the injunctions the Commission states that the issue consists in guaranteeing Zoja's survival as a competitive manufacturer of ethambutol. This competitive position must be evaluated not only in the light of the situations on the market at the moment the Decision was issued, but rather from the point of view that Zoja is the only potential competitor of American Cyanamid Company. Consequently the Commission, in issuing the injunctions, had to take into account the potential role of Zoja within the Common Market.

With respect to the quantity which the applicants were ordered to supply, the Commission observes that it was not possible to calculate exactly the quantities Zoja urgently needed to survive. Therefore the average of the last annual supply which Zoja received from Istituto and the annual order for 1971 applied to a period between three and four months was adopted as a criterion for Zoja's urgent needs:

= 29166 kg aminobutanol.

Having by this life-line insured the survival of Zoja, the Commission did not intend to impose the supply of predetermined quantities in the future, but limited itself to relying on the presentation of proposals. If the applicants were able to show that the extent of the life-line was excessive, nothing would prevent the error in evaluation from being taken into account, when establishing future supplies. But the defendant stresses that the criterion cannot be based on a simple distinction between the actual sales of Zoja within the Common Market and those to third countries, because this would ignore the necessity of Zoja's survival as a viable producer. An important decrease in Zoja's turnover could not occur without seriously affecting its competitiveness. That is why it would be incorrect to consider the production aimed at third countries not to be relevant to the present case.

CSC and Istituto answer that Regulation No 17 contains an exhaustive list of the measures which the Council, pursuant to Article 87, has authorized the Commission to take. The Commission cannot extend this list by stating that any measure it considers indispensable is implied in the authorization to give cease-and-desist orders. If the Commission considered it necessary to have larger powers, it could always propose an enabling regulation to the Council.

The applicants repeat that any regulatory powers of the Commission in the field of competition are strictly limited to measures to protect competition in intra-community trade. Therefore the injunctions are unacceptable, because they oblige the applicants to supply. Zoja with quantities of intermediary products that are related to Zoja's sales in the previous years, sales which have only been effectuated for a small part in the Common Market (about 10 %). In fact the Commission has obliged CSC to supply Zoja with raw material of which, after being processed, about 90 % will be sold in third countries. This, clearly, constitutes a misuse of powers.

CSC rejects the Commission's argument that the amount of immediate deliveries ordered by the Commission constituted a life-line for Zoja. The Decision does not mention Zoja's general economic position, its financial and stock-position and the possibility for Zoja to continue manufacturing specialities on the basis of bulk-ethambutol or other intermediary products.

The Commission, in its rejoinder, maintains its previous argument.

CSC and Istituto submit that the Commission has infringed the rules of procedure in basing its decision on insufficiently investigated facts, namely with respect to the alleged economic unity between CSC and Istituto, the assumption that CSC is the only producer of aminobutanol and nitropropane, the delimitation of the relevant market, the dominant position of CSC-Istituto on the market, the position of Zoja, and the trade between Member States in ethambutol and ethambutol-based specialities. Further the Decision infringes Article 19 of Regulation 17 and Articles 2 and 4 of Regulation 99/63, because it is based on a number of alleged facts which were never communicated to CSC and Istituto in the Notice of Objections. Finally the Commission infringed the rules of procedure in imposing on CSC and Istituto disproportionate injunctions. The applicants state that the Commission has disregarded the standards of impartiality needed to ensure fair proceedings by neglecting to investigate matters suggested by CSC and Istituto.

It follows that the Commission's reasoning is based on a presentation of facts which is erroneous and incomplete to such an extent that the reasoning cannot constitute a sufficient basis for the Decision, which therefore, pursuant to Article 190 EEC, is null and void.

The Commission answers that the first allegation of CSC and Istituto has been covered by its previous remarks on the different complaints elaborated by the applicants. The Commission admits that there are two points on which the Decision differs from the Notice of Objections:

Both alterations are correct because they are based on accurate facts, known to the applicants. Consequently the reasoning of the Decision is substantial and sufficient. The Commission considers it superfluous to contest the allegations made by CSC regarding violation of Article 190 EEC.

the unlawful nature of the refusal to sell is particularly clear.