Competition and trade law: Draft Commission Notice on market definition

United Kingdom


Draft commission Notice on market definition

The Commission has issued a draft Notice on defining the relevant market in EC competition law. This Notice is intended to apply equally to Articles 85 and 86 of the EC Treaty as well as the Merger Regulation.

Defining the relevant market is the key to analysing any effect on competition and it is obviously important that the Commission and national authorities analyse the relevant market in the same way. In the Notice, the Commission says that sources to help it analyse the market include customers of the parties, the parties themselves, relevant professional associations and, where appropriate, undertakings in upstream markets.

To define product markets, it is not enough to compare product characteristics and their intended uses. The Commission will consider, for example, the evidence of substitution in the recent past, views of customers and competitors, customer preferences and the barriers and costs of switching consumption.

As for the geographic market, the Notice suggests that basic demand characteristics (eg. national preferences), views of customers and competitors, current geographic patterns of purchases, trade flows and barriers and costs of switching sources are all relevant factors.