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Cartels and Anticompetitive Agreements

Market definition

Market share thresholds are important in assessing whether an agreement or a merger restricts competition or not. The quantification of market shares demands that the relevant markets are defined first.


There are a number of quantitative techniques that have specifically been designed for the purpose of delineating markets. These tests consist of various econometric and statistical approaches. 


In February 2024, the European Commission adopted a revised Market Definition Notice in which it gives guidance on the practical application of market definition concepts and principles.


The new Notice replaces the original adopted in 1997 and reflects the significant developments since then, in particular the increased digitalisation and the new ways of offering goods and services, as well as the interconnected nature of commercial exchanges. This includes the importance of non-price parameters, as well as guidance on digital markets, innovation-intensive industries, and geographic market definition.


EE&MC applies some or all of the following techniques that help with identifying the boundaries of competition between companies: 

  • estimates of elasticities and cross-price elasticities for the demand of a product,
  • tests based on similarity of price movements over time,
  • the analysis of causality between price series,
  • the analysis of similarity of price levels,
  • the analysis of convergence of price levels,
  • consumer preferences (including those not related to price),
  • evidence of substitution in the recent past,
  • Hypothetical Monopolist (or SNIPP) test.

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