§1.2 Role of market definition

6. Market definition is a tool that the Commission uses to identify and define the boundaries of competition between undertakings. The main purpose of market definition is to identify in a systematic way the effective and immediate competitive constraints faced by the undertakings involved (8) when they offer particular products (9) in a particular area. Market definition leads to the identification of the relevant competitors of the undertaking(s) involved when they offer those products, as well as the relevant customers. Only products that exert effective and immediate competitive constraints within the relevant timeframe form part of the same relevant market as those of the undertaking(s) involved, while other less effective, or merely potential, constraints are considered as part of the competitive assessment. 7. The same considerations apply when defining relevant markets for the purchase of particular products in a particular area (‘purchasing markets’) (10). In that case, the main purpose of market definition is to identify in a systematic way the effective and immediate competitive constraints faced by the undertaking(s) involved when they purchase those products (11). Accordingly, market definition leads to the identification of the relevant competitors of the undertaking(s) involved when they purchase the products, as well as the relevant suppliers. The remainder of this Notice will not discuss purchasing markets further, but the guidance set out in this Notice also applies to purchasing markets, taking into account their specificities (12) and the facts of the case at hand. 8. The Commission generally uses market definition where there is a need to assess the relative competitive strength of undertakings as part of the competitive assessment (13) and, most notably, to assess whether an undertaking holds market power (14). Market definition is thus an intermediate tool to structure and facilitate the competitive assessment in appropriate cases and is not a mandatory step in all assessments under Union competition law. When subsequently conducting the competitive assessment and analysing market power, the Commission carries out an overall assessment of all relevant constraints on the undertaking(s) involved in the relevant product and geographic markets, which may include an assessment of barriers to entry or expansion, the impact of scale economies (which may include those that may be drawn from out-of-market activities) or network effects, access to specific assets and inputs, as well as product differentiation (15). That assessment may also include sufficiently foreseeable changes in such constraints when the case calls for a forward-looking assessment. As an intermediate step in the overall assessment process, it is necessary for market definition to be up-to-date at the time of the relevant conduct or concentration and based on facts, as further explained in paragraph 14. 9. The Commission’s use of market definition is closely related to the objectives pursued by the various Union competition law instruments: (a) in assessments under Article 102 TFEU, the Commission generally defines the relevant market when assessing the existence of a dominant position (16); (b) in assessments under the Merger Regulation, the Commission regularly defines the relevant market when assessing the effects on competition of a concentration (17); (c) in assessments under Article 101 TFEU, the Commission uses market definition in particular to determine whether an appreciable restriction of competition exists or to establish whether the condition in Article 101(3), point (b), TFEU for an exemption from the application of Article 101(1) TFEU is met (18). In practice, the Commission tends to use market definition when assessing agreements (19) that have as their effect the prevention, restriction or distortion of competition. By contrast, the Commission usually does not define the relevant market when assessing agreements that have as their object the prevention, restriction or distortion of competition, such as cartel agreements, and is under no obligation to do so (20). 10. Market definition makes it possible to calculate market shares, which the Commission may use, among other elements, to assess an undertaking’s competitive strength for the purposes of the competitive assessment. When analysing market power, the Commission may also look at trends which are likely to continue or foreseeable developments in relation to such market shares, as well as at constraints that may not be evident from market shares alone, as further explained in paragraphs 106 and 113. The Commission may also use market shares as a first screening tool to assess whether competition concerns may arise. Market share thresholds are one of the parameters used to determine the scope of the block exemption regulations applying Article 101(3) TFEU to certain categories of agreements (21); to assess whether there may be an effect on trade under Articles 101 and 102 TFEU (22), and to identify concentrations deemed from the outset not to raise competition concerns under the Merger Regulation with respect to any markets or with respect to certain markets (23).

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Source: EUR-Lex (Cellar) · retrieved 2026-09-07