Market definition

Market definition is needed in order to distinguish between the different areas in which companies compete with each other. They give an overview of a specific competition situation that the concerned companies have to face.

In EU competition law, the approach to define markets are specified in the Notice of the European Commission on the definition of the relevant market adopted on 9 December 1997. The definition of the relevant market concerns product and geographical aspects. According to this notice, the key criteria for determining the relevant market are demand and supply substitutability. The notice states that authorities rate the HM test, known in the US as the SSNIP test, as the appropriate methodology to define the relevant market.

A proper definition of the relevant market is crucial in order to conduct a comprehensive competitive analysis. A too narrowly defined market may lead to misleading conclusions. This is especially the case when a high market share resulting from an incorrectly defined market becomes central in the procedure.

Our expertise in the field of market definition is very diverse and includes the use of conjoint analyses. EE&MC has worked extensively in various markets on the definition of the relevant market.