§1.3 General principles of market definition

11. The Commission applies a number of principles when it defines relevant markets for the purpose of enforcing Union competition law. Those principles are outlined in paragraphs 12 to 21. 12. First, in line with the case law of the Court of Justice and the General Court of the European Union (‘the Union Courts’) and the Commission’s case practice, the relevant market within which the Commission appraises competition dynamics typically comprises a product and a geographic dimension (24). (a) The relevant product market comprises all those products that customers regard as interchangeable or substitutable to the product(s) of the undertaking(s) involved, based on the products’ characteristics, their prices and their intended use, taking into consideration the conditions of competition and the structure of supply and demand on the market (25). (b) The relevant geographic market comprises the geographic area in which the undertakings involved supply or demand relevant products, in which the conditions of competition are sufficiently homogeneous for the effects of the conduct or concentration under investigation to be able to be assessed, and which can be distinguished from other geographic areas, in particular because conditions of competition are appreciably different in those areas (26). 13. In certain cases, temporal considerations may also be relevant when defining the relevant market, for example where factors such as seasonality or peak/off-peak time considerations substantially affect customer preferences or the structure of supply (27). 14. Second, market definition is based on the facts of the case (28). Relevant markets within the meaning of Union competition law differ from sector to sector, at different levels of the supply chain and sometimes across geographic areas. Where past Commission decisions concerning a specific market exist, the Commission may start its analysis from such prior decisions and verify whether the definition of the relevant market used in those past decisions may be applied to the case at hand. However, the Commission is not bound to apply the definition of a relevant market from its past decisions in future cases (29) and will always be attentive to possible changes driven by broader trends such as digitalisation, shifts in value chains or in sourcing by customers, or developments in the degree of globalisation of commercial exchanges. 15. Third, when defining the relevant market, the Commission takes into account the various parameters of competition that customers consider relevant in the area and period assessed. Those parameters may include the product’s price, but also its degree of innovation and its quality in various aspects – such as its sustainability, resource efficiency, durability, the value and variety of uses offered by the product, the possibility to integrate the product with other products, the image conveyed or the security and privacy protection afforded, as well as its availability, including in terms of lead-time, resilience of supply chains, reliability of supply and transport costs. The relative importance of these parameters for customers may change over time. 16. Fourth, market definition, where required, is only one step in the Commission’s assessment under Union competition law. The Commission only decides whether there are competition concerns after having carried out a competitive assessment (30). Market definition is therefore an intermediate step in the assessment and does not prejudge the outcome of the Commission’s assessment under Union competition law. 17. Fifth, market definition allows for a distinction between competitive constraints from within and from outside the market, by including only the effective and immediate competitive constraints in the relevant market. However, the Commission takes into account all competitive constraints (whether effective and immediate or not) in the competitive assessment, bearing in mind that out-of-market constraints are more remote constraints on the undertaking(s) involved. For more details on the relationship with the competitive assessment, see also paragraph 8 above. 18. Sixth, the markets defined are often the same across cases and assessments when the same economic activity in terms of products and geography is concerned (31). Nevertheless, as market definition seeks to identify the effective and immediate competitive constraints that are relevant for the competitive assessment of a specific conduct or concentration, the outcome of market definition can differ depending on: (a) the undertaking(s) involved. As the activities of the undertaking(s) involved determine the starting point for the substitution analysis, markets may be defined differently depending on the undertaking(s) involved. This can arise, for example, when the competitive constraints that the undertakings impose on each other are asymmetric, that is to say a certain undertaking may constrain another undertaking, while the same does not apply vice versa (32). In that case, taking the products of different undertakings as a starting point for the substitution analysis – for example because the parties to the concentration are different or because a different undertaking’s behaviour is under investigation – may lead to different results in terms of market definition. (b) the time period considered. The Commission takes into account the competitive conditions prevailing at the time of the conduct or concentration that is being assessed (which may include sufficiently foreseeable developments when the case calls for a forward-looking assessment, as set out in paragraph 21). Accordingly, market definition results may vary over time if competition dynamics change. This may be the case, for example, when competitive conditions in distinct geographic areas converge over time and become sufficiently homogeneous, so that areas that were initially part of distinct geographic markets are later included in the same geographic market (33), or when predicted market developments materialise that were previously considered remote or uncertain. (c) the competitive concerns under consideration. The relevant effective and immediate competitive constraints in a specific case may depend on the competitive concerns under consideration. For example, those constraints may depend on whether the concern being explored is that the merger would lead to increases in prices of existing products, or that the same merger would reduce investments in product development (34). Furthermore, the usual approach to market definition might need to be adapted where existing market power is liable to distort the analysis (for instance in relation to a theory of harm under Article 102 TFEU) (35) . 19. Seventh, the concept of ‘relevant market’ in Union competition law is different from the use of the term ‘market’ in other contexts, in particular in business contexts. Undertakings often use the term ‘market’ to refer to the area or place where they sell their products, or to refer broadly to the industry or sector to which they belong. For instance, undertakings may say that they are active in a global market where they consider that they compete globally for revenues against undertakings from all continents. However, that does not mean that the products of all globally active undertakings are substitutable for customers in the EEA, or that customers face sufficiently homogeneous conditions of competition globally, which are the relevant criteria for the Commission’s market definition under Union competition law, as further explained in Section 2. Broader dynamics outside the scope of defined relevant markets for competition law purposes, such as differentiated economies of scale enjoyed by different undertakings from their global activities on multiple product or geographic markets are not relevant for the intermediate step whereby markets are defined for competition law purposes, but they can be relevant for the competitive assessment and, if so, will be duly takeninto account in that context. Moreover, the concept or the definition of a ‘market’ used in fields of law other than competition law, for example in the area of electronic communications (36), is not decisive for the purposes of Union competition law. 20. Eighth, the Commission is not obliged to reach a definitive conclusion on the precise scope of the market where the outcome of the Commission’s assessment would not change under various plausible market definitions. The Commission may leave the market definition open (37) both in cases where competition concerns arise regardless of the market definition applied (38) and in cases where no competition concerns arise regardless of the market definition applied (39). When it leaves the market definition open, the Commission usually carries out the competitive assessment for all plausible alternative market definitions, though the depth of its competitive analysis may vary between the alternative markets assessed (40). 21. Ninth, the Commission may take into account expected transitions in the structure of a market when the case calls for a forward-looking assessment. Structural market transitions differ from considerations relating to market entry by potential competitors (‘potential competition’) (41) in that they affect the general dynamics of supply and demand in a market and therefore the general reactions to changes in relative supply conditions. Such structural market transitions should be distinguished from changes that only affect individual undertakings or customers offering or demanding products in the relevant markets. Structural market transitions can affect the definition of the relevant product market, for example where there is sufficient probability that new types of products are about to emerge on the market (42), or the definition of the relevant geographic market, for example where there are impending technological changes or impending changes in the regulatory framework (43). The Commission takes expected short-term or medium-term structural market transitions into account where they would lead to effective changes in the general dynamics of supply and demand within the period that is relevant for the Commission’s assessment (44). For the Commission to be able to do so, there must be reliable evidence (45) that there is sufficient likelihood that the projected structural changes will take place. Such evidence needs to go beyond mere assumptions that observed trends will continue or that certain undertakings will change their behaviour.

← 1.2 · All articles · 2 →

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