COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE EVALUATION of the Commission Notice on the definition of relevant market for the purposes of Community competition law of 9 December 1997
Date: 2021-07-12
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, administrative transparency, competition, competition law, economic concentration, restriction on competition, restrictive trade practice, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 12.7.2021  SWD(2021) 200 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE EVALUATION  of the      Commission Notice on the definition of relevant market for the purposes of Community competition law of 9 December 1997           {SEC(2021) 295 final} - {SWD(2021) 199 final}  
 
 
Background and objectives  

The EU antitrust and merger rules protect and foster competition in the internal market, to 
the  benefit  of  consumers,  by  prohibiting  anti-competitive  agreements  and  the  abuse  of  a 
dominant  position.  They  also  grant  the  Commission  the  power  to  prohibit  concentrations 
that would lead to a significant impediment to effective competition. Enforcement of the EU 
competition  rules  contributes  to  an  integrated  internal  market,  balanced  economic  growth 
and a highly competitive social market economy for the sustainable development of Europe. 

Market definition is a tool the Commission uses in its enforcement of those rules to identify 
the boundaries of competition between companies. The Commission uses market definition 
in particular in cases where the assessment of market power is relevant for the competitive 
assessment.  Market  definition  enables  the  Commission  to  identify  the  competitive 
constraints  that  may  influence  the  economic  behaviour  of  the  companies  and  to  calculate 
market shares, which provide a preliminary indication of market power. Market definition is 
only  a  first  step,  however,  and  the  Commission  will  only  decide  on  whether  or  not 
competition concerns arise after having carried out the full competitive assessment. 

Market definition is based on evidence and it relies on established economic principles. The 
Commission is bound by the facts of the case. Judicial review by the EU courts ensures that 
the  Commission  follows  these  principles.  Furthermore,  market  definition  is  primarily 
customer-centric, as it as a starting point assesses which alternative products or services are 
available  to  the  customer  to  satisfy  the  same  need.  As  a  consequence,  the  concept  of 
relevant  market  in  antitrust  and  merger  enforcement  is  different  from  the  definitions  of 
markets used in other contexts. 

The Commission published its Notice on the relevant market for the purposes of Community 
competition law (‘the Notice’) in 1997. The Notice has remained unchanged since then. The 
Notice aims to increase the transparency of the Commission’s policy and decision-making 
in  EU  antitrust  and  merger  enforcement,  and  to  help  businesses  better  anticipate  the 
possibility  that  the  Commission  may  raise  competition  concerns  in  an  individual  case.  To 
that  end,  the  Notice  aims  to  provide  correct,  comprehensive  and  clear  guidance  on  the 
Commission’s approach to market definition in EU competition law. 

The purpose of the evaluation was to assess the functioning of the Notice and in particular 
to assess whether it may require updating. Since the Notice’s publication in 1997, there have 
been  market  developments  and  evolutions  in  best  practices  in  market  definition,  derived 
from  EU  case-law,  the  Commission’s  case  practice,  the  practice  of  other  competition 
authorities  and  from  academic  research.  The  evaluation  is  part  of  a  broader  Commission 
effort to make sure that EU competition policy and rules are fit for the modern economy.  

Main findings 

Overall,  the  evidence  gathered  in  the  evaluation  suggests  that  the  Notice  is  a  very  useful 
instrument  that  remains  generally  relevant.  It  facilitates  competition  enforcement  and 
compliance in the EU by providing transparency on an important first step in many of the 
Commission’s  competition  assessments  and  by  allowing  companies  to  better  anticipate 
whether the Commission  may raise competition  concerns.  However, the evaluation  results 

1 

 
suggest as well that there are areas where the Notice may not fully reflect developments in 
the Commission’s approach, and latest developments in EU case-law. 

Relevance.  The need to facilitate competition  enforcement  and  compliance in  the internal 
market,  to  the  benefit  of  consumers,  remains  pertinent  today  as  one  of  the  goals  of  the 
Union,  one  that  has  been  reflected  in  the  EU  Treaties  since  the  EU’s  inception.  The 
evaluation  results  indicate  that  the  objective  of  providing  transparency  through  correct, 
comprehensive  and  clear  guidance  on  the  Commission’s  approach  to  market  definition  is 
still a very relevant part of meeting those needs. In some respects, it is even more important 
today than in 1997.  

Effectiveness.  The  evaluation  results  indicate  that  the  Notice  is  effective  in  providing 
guidance and transparency to stakeholders in many respects, but not necessarily in all.  

First,  on  key  issues,  the  Notice  continues  to  provide  correct,  comprehensive  and  clear 
guidance on market definition. It achieves this in particular by adequately summarising best 
practices  in  market  definition,  as  derived  from  EU  case-law,  from  the  Commission’s  case 
practice,  from  the  practice  of  other  leading  competition  authorities  and  from  academic 
research.  The  role  of  market  definition  and  its  basic  principles  have  remained  largely 
unchanged since 1997 and have been confirmed in large part in judgments of the EU Courts. 
The  Commission’s  market  definitions  continue  to  be  guided  by  definition  of  product  and 
geographic markets on the basis of demand-side and supply-side substitutability, relying on 
short-term  and effective  constraints in  that  assessment, taking into account  price  and non-
price parameters, and carrying out the review using a broad evidence base. This extends to 
considerations  on  competitive  pressure  from  imports  and  potential  competition,  including 
the  distinction  between  the  market  definition  phase  (where  potential  competition  is  not 
considered)  and  the  competitive  assessment  phase  (where  potential  competition  is 
considered and where import competition will also be considered even if it did not result in 
a wider market definition). 

Second,  the  evaluation  results  suggest  that  there  are  areas  where  the  Notice  might  not  be 
fully up to date, including evolutions set out in EU case-law. The Commission has refined 
its  approach  to  market  definition  in  line  with  the  theories  of  harm  investigated,  the 
prevailing market conditions and the sophistication of available tools. Such areas include the 
use  and  purpose  of  the  SSNIP  (small  significant  non-transitory  increase  in  price)  test  in 
different  market  constellations,  the  assessment  of  market  definitions  in  rapidly  evolving 
markets,  asymmetric  constraints,  the  assessment  of  geographic  markets  in  conditions  of 
globalisation  and  import  competition,  quantitative  techniques,  the  calculation  of  market 
shares, and non-price competition, including innovation.  

Third,  the  evaluation  results  indicate  that  while  the  principles  of  market  definition  remain 
unchanged, their application in digital contexts can lead to additional complexities that may 

2 

 
 
 
 
 
not  be  fully  addressed  in  the  Notice.  These  include  defining  markets  for  multi-sided 
platforms, in particular where services are supplied at zero monetary price, defining markets 
for ‘ecosystems’ or for data, and assessing online vs offline competition. Digitisation may 
also lead to new barriers to entry and switching costs. Reasons for this include the role of 
data  (portability),  interoperability,  privacy  questions,  networks  effects  and  single-/multi-
homing. In addition, digitisation may increase the need to reflect non-price considerations in 
substitution  assessments.  However,  the  evaluation  results  also  show  that  not  all  of  the 
market  definition  issues  arising  as  a  result  of  digitisation  have  been  settled  into  best 
practices, but rather that practices are likely to evolve further in the future. 

Efficiency.  The  evaluation  results  suggests  that  there  are  no  costs  associated  with  the 
Notice, as compared to  a scenario where no guidance were provided. On the contrary, the 
Notice generates benefits not only for the Commission’s work but also for the stakeholders 
using  it.  Without  the  Notice,  companies  would  have  to  dedicate  additional  resources  to 
researching  a  body  of  Commission  decisions,  court  judgments  and  literature  on  market 
definition to determine how the Commission would likely define the relevant market(s) and 
what elements it would take into account. Nevertheless, the evaluation results indicate that 
the  benefits  for  both  stakeholders  and  the  Commission  could  increase  if  the  Notice  was 
updated in certain specific points.  

Coherence.  The  evaluation  results  suggest  that  the  Notice’s  different  components  operate 
well together and that they are generally in line with other competition law guidance, case-
law  and  other  EU  policies.  Nevertheless,  the  results  of  the  evaluation  indicate  that  the 
Notice does not reflect certain clarifications stemming from the judgments of the EU Courts 
and that it has not been updated by reference to the merger control standard of ‘significant 
impediment to effective competition’ introduced by the 2004 EU Merger Regulation.  

EU added value. The evaluation suggests that the Notice has added value by helping ensure 
a  consistent  approach  to  EU  competition  rules  among  the  national  competition  authorities 
and  the  Commission.  The  evaluation  results  also  indicate  that  the  added  value  could  be 
higher  if  the  Notice  were  easier  to  use,  for  instance  and  where  appropriate,  if  it  included 
examples  or  references  to  the  case-law  underlying  its  statements  or  provided  guidance  on 
market definition issues in national and regional markets which are often relevant for NCAs. 

Follow-up 

It follows from the above that there is a continued need for a Notice to provide guidance on 
the Commission’s approach to market definition. However, the results also show that there 
are  areas  where  the  Notice  might  not  be  fully  up  to  date  in  light  of  evolutions  in  the  EU 
Courts’  case  law,  refinements  to  the  Commission’s  case  practice  and  that  of  other 
competition authorities, and latest findings of academic research.  

3