§3.2.1.6 Implementations of the SSNIP test

59. In some cases, it may also be possible to determine the boundaries of the relevant market by assessing quantitatively whether a SSNIP would be profitable for a hypothetical monopolist (85). An example of an implementation of the SSNIP test is a ‘critical loss analysis’ (86). Critical loss analysis normally involves determining the maximum loss of sales volume that can be incurred for a SSNIP to be profitable for a hypothetical monopolist. This ‘critical loss’ is then compared to an estimate of the likely actual loss of sales volume resulting from the SSNIP. If the critical loss is greater than the likely actual loss, a SSNIP would be profitable, which indicates that the products in the candidate market form a relevant product market. In the opposite scenario, the candidate market may have to be widened. The specifics of the analysis to be carried out depend on the particular circumstances of each case. When assessing critical loss analysis, the Commission also takes into account that a high observed percentage profit margin not only implies a low critical loss, but may also indicate that the actual elasticity of demand – and hence the actual loss – is likely to be low, and vice versa (87).

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