EU Commission Revises Market Definition Guidelines
In a significant move aimed at modernizing its approach to competition regulation and keeping pace with the evolving digital landscape, the European Commission has announced the adoption of a revised Market Definition Notice. This notice serves as a cornerstone for delineating the boundaries of competition in mergers and antitrust cases within the European Union.
The revised notice, the first update since its inception in 1997, reflects the profound changes brought about by digitalization and the interconnected nature of commercial exchanges. It aims to provide clearer guidance for businesses, enhance transparency, and ensure legal certainty in the enforcement of competition policies.
Margrethe Vestager, the Executive Vice President in charge of competition policy, emphasized the importance of adapting to fast-changing markets, stating, "With this thorough review of our guidance, we reinforce important principles of competition enforcement and address new market realities, such as digitalization and increasingly interconnected and globalized commercial activity."
Key elements of the revised Market Definition Notice include accessible guidance structured with concrete examples to illustrate practical applications of market definition concepts, making it more accessible for businesses. Recognizing the significance of factors beyond price in market definition, such as innovation, quality, reliable supply, and sustainability, Specific guidance tailored to digital markets, including multi-sided markets and digital ecosystems, reflects the unique dynamics of these sectors.
Guidance for industries where competition revolves around innovation facilitates the assessment of new product developments. Clarifications on conducting forward-looking assessments, particularly in markets undergoing structural transitions due to regulatory or technological changes, are also provided. Detailed considerations for defining geographic markets, including factors justifying global, EEA-wide, national, or local definitions, are outlined.
Clarifications on quantitative techniques like the SSNIP test and alternative metrics for calculating market shares are included. An extensive overview of various sources of evidence and their probative value for market definition analyses is also provided.
The adoption of this revised Market Definition Notice signifies the European Commission's commitment to ensuring that its competition policies remain relevant and effective in the face of rapid technological advancements and changing market dynamics. By providing updated and comprehensive guidance, the Commission aims to facilitate compliance, promote fair competition, and contribute to the efficient enforcement of competition law across the European Union.
