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The EU’s New Market Definition Notice

 |  March 20, 2024

By:   (Steptoe)

Following an extensive consultation period, the European Commission has approved a new Notice on the definition of the relevant market for EU competition law purposes. This Notice arrives amidst a significant overhaul of competition laws, encompassing various new block exemption regulations, updated guidelines on vertical and horizontal agreements, the Digital Markets Act, the Digital Services Act, and the Foreign Subsidies Regulation.

It is important to note that the primary aim of the Notice is to offer guidance, including transparency, to businesses regarding the Commission’s approach in analyzing competition boundaries between companies and the extent of market power exerted. Recognizing substantial changes since the previous market definition notice of 1997, such as the emergence of digital markets, intricate supply chains, and the challenges of digital and green transitions, the Commission acknowledges that competitive parameters extend beyond product characteristics, price, and intended use.

Factors like security, privacy protection, durability, integration possibilities, range of uses, and behavioral biases also play a role. The Commission aims to incorporate these developments, along with jurisprudential changes and its own practices, ensuring consistency with other competition authorities. By enhancing transparency, the Notice aims to provide clarity on the Commission’s methodology, evidence, and criteria for applying competition rules, enabling businesses to anticipate relevant information for market definition purposes.

Market definition serves as a tool for analyzing proposed mergers, full-function joint ventures under the merger regulation, antitrust enforcement concerning bilateral or multilateral conduct under Article 101 TFEU, unilateral conduct by potentially dominant companies under Article 102 TFEU, and enforcement of equivalent provisions under the Agreement on the European Economic Area. Customers consider various factors, including price, innovation, and quality aspects like sustainability, security, and reliability of supply, which the Commission examines closely.