Refusal by a Dominant Firm to Sell Raw Materials

• DOI: 10.1177/0003603X7401900307
• Published date: 01 September 1974
• Date: 01 September 1974
• Subject Matter: Article

REFUSAL

BY A DOMINANT FIRM

TO

SELL

RAW MATERIALS

Decision by the

Europec!ln

Court

EDITORIAL

NOTE:

On March 6, 1974, the Court

of

Justice

of

the

Europea,n Communities delivered

its

judgment

on an appeal of a

decision by the E. C. Commission by which Commercial Solvents

Corporation

and

its

;)1%

oicncd

su1J.~idiary,

TSTITUTO

CHEMIOTERAPICO

ITALIANO,

were fined

and

ordered to

supply

specified amounts of

intermediary

chemical products to a rnanufact1lrer

tdw

used these

products in

making

anti-tuberculosis drugs

and

to whom these com-

panies

had

been supplier.

The

Commission

had

found

the companies

in violation

of

Article

86

of

the

Treaty

of

Rome

in

that

refusal

to

.~ell

by them constituted abuse

of

economic power by a dominant firm.

The follou'ing excerpt from the Court's decision sets [orth. its

conclusions.

I.

THE

ApPLICATION

OF

ARTICLE

86

It

is established

that

in 1962 CSC acquired 51% of the

voting stock in

ISTITUTO.

CSC has 50% representation on the

executive committee

and

on the board of directors of

ISTITUTO.

The chairman of the board of directors, who has a casting

vote in the event of votes being equal, is also a representative

of CSC. The executive officers (consiglieri delegati) responsi-

ble

for

the administration of

ISTITUTO

were the same persons

before

and

after

1962, although

after

1962 they have had to

obtain the approval of the executive committee for invest-

ments above a certain level.

CSC manufactures

and

sells 'among other things products

based on nitroparaffins, inter alia 1-nitropropane ('nitropro-

pane')

and

aderivative thereof 2-amino-1-butanol ('amino-

butanol'), an intermediary product for the manufacture of

ethambutol. Until 1970

ISTITUTO

acted as a re-seller of nitro-

propane

and

aminobutanol produced by CSC in the United

States. At the beginning of 1970 CSC decided

that

it

would

no longer supply the Common Market with these products and

informed

ISTITUTO

that

thereafter these products would be

available only in such quantities as

had

already been com-

mitted

for

resale. Since then CSC has changed

its

policy and

605