Opinion ID: 1303239
Heading Depth: 1
Heading Rank: 9

Heading: Relevant Market

Text: The first step in determining whether Heath has monopoly power is to determine the area in which its market share is to be measured. The relevant market has been defined as the area of effective competition within which the defendant operates. Tampa Electric Co. v. Nashville Co., 365 U.S. 320, 327, 81 S.Ct. 623, 627, 5 L.Ed.2d 580 (1961). Accord, United States v. du Pont & Co., 353 U.S. 586, 77 S.Ct. 872, 1 L.Ed.2d 1057 (1957); Standard Oil Co. v. United States, 337 U.S. 293, 69 S.Ct. 1051, 93 L.Ed. 1371 (1949). The objective in defining the relevant market is to identify those that compete with each other in a given product and geographic area in order to determine whether others can effectively constrain the prices of the alleged monopolist. 1 ABA Antitrust Section, Antitrust Law Developments (Third) 198 (1992). See, Grinnell Corp., supra ; Tampa Electric Co., supra ; du Pont & Co., supra. Normally, the relevant market must be identified in terms of two dimensions: the products or services affected, the relevant product market, and the geographic areas involved, the relevant geographic market. Brown Shoe Co. v. United States, 370 U.S. 294, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962). The relevant product market is composed of products that have reasonable interchangeability. United States v. du Pont & Co., 351 U.S. 377, 76 S.Ct. 994, 100 L.Ed. 1264 (1956). As noted earlier, the Eastman Kodak Co. Court held that a manufacturer might have substantial market power in the market for its own replacement parts, notwithstanding that it lacked market power in the market for the photocopiers themselves. The Court determined that the relevant product market for antitrust purposes was determined by the choices available to Eastman Kodak equipment owners, reasoning that because service and parts for Eastman Kodak equipment are not interchangeable with other manufacturers' service and parts, the relevant market from the Eastman Kodak equipment owners' perspective is composed of only those companies that service Eastman Kodak machines. The Court noted that a `market is composed of products that have reasonable interchangeability.' 504 U.S. at ___, 112 S.Ct. at 2090. Therefore, the Eastman Kodak Co. Court concluded that the proper market definition in that case could be determined only after a factual inquiry into the `commercial realities'  faced by consumers. Id. The relevant geographic market is the geographic area in which sellers of the particular product or service operate and to which purchasers can practicably turn for such products or services. Tampa Electric Co., supra . The criteria to be used in determining the appropriate geographic market are essentially similar to those used to determine the relevant product market.... Congress prescribed a pragmatic, factual approach to the definition of the relevant market and not a formal, legalistic one. The geographic market selected must, therefore, both correspond to the commercial realities of the industry and be economically significant. Thus, although the geographic market in some instances may encompass the entire Nation, under other circumstances it may be as small as a single metropolitan area. Brown Shoe Co., 370 U.S. at 336-37. The record implies that Heath is the only supplier of specific Heath assemblies necessary for the repair of Heath equipment throughout the nation. If only Heath equipment owners who agree to use Heath's repair service or a repair service Heath designates are able to get parts to complete the repair, Heath is the only market participant.