Competition law involves the promotion or maintenance of a competitive market. Market concentration measures the extent to which market shares are concentrated between a small number of firms. This is why cartels are illegal under eu competition law and why the european commission imposes heavy fines on companies involved in a cartel. In so doing, it proposes a revised basic definition, which takes into account case law. Market definition is central to most antitrust cases, because determining the existence of market power typically requires the definition of a relevant market.
Aviation and competition law research is a vienna based private and independent research organisation that focuses on research and knowledge transfer in the field of. Jun 28, 2019 a description of how market definition developed and gradually imposed itself in competition law, originally in the usa and then in the eu. For further details, see the competition law guideline agreements and concerted practices oft401. This module explores the role and importance of market definition in competition law investigations, including key elements such as the ssnip analysis and the information that agencies evaluate to determine antitrust markets. I wont sell in your market if you dont sell in mine.
Guidelines on the definition of relevant market wipo. Eu competition law is governed by articles 81 and 82 of the ec treaty, and it is article 82 that possesses the greatest affiliation to the definition of relevant market. By making public the procedures followed by the commission regarding market definition and by indicating the criteria and evidence. However, it may still be appropriate for competition authorities in this situation to assess proposed concentrations and. In eu competition law, the approach to define markets are specified in the notice of the european commission on the definition of the relevant market adopted. Market division or customer allocation federal trade. Well do this by looking at some particular concepts.
This chapter builds on the general issues addressed in chapter 5, focusing specifically on the method of defining product markets under eu competition law. In june 2018, the oecd held a discussion to explore whether fewer competitors necessarily means less competition. It is often taken as a proxy for the intensity of competition. The term competition law is also used in other countries other than the u. Economists and courts often use market power and monopoly power interchangeably. George hay, market definition and market dominance. If the market is defined narrowly, a company is more likely to have a dominant position and thus is more likely to face increased scrutiny of its commercial strategies. They give an overview of a specific competition situation that the concerned companies have to face. Dissecting the market definition of competition law duration.
Professor of competition law, tilec, tilburg university, the netherlands. Competition law law and legal definition uslegal, inc. In this book, the first comprehensive, unifying view of market definition, miguel ferro adeptly explores the different economiclegal issues that arise in eu competition law. A public place appointed by public authority, where all sorts of things necessary for the subsistence, or for the conveniences of life, are sold. Jun 28, 2019 the maintenance of a fair, competitive market among member states is critical to the functioning of the eu economy. Jul 17, 2014 dissecting the market definition of competition law duration. Antitrust or competition law financial definition of. Competition law is implemented through public and private enforcement. This definition explains what competition law, also known as antitrust law, is and how it is designed to keep markets fair and protect them from manipulation by monopolies and oligopolies. The maintenance of a fair, competitive market among member states is critical to. It serves to establish the framework within which competition policy is applied by the commission. The concept of the relevant market plays a central and often critical role in the application of eu competition law. Commission notice on the definition of relevant market for the purposes of community competition law official journal c 372 of 9.
This notice provides guidance as to how the commission applies the concept of relevant product and geographic market in its ongoing enforcement of european union eu competition law. Notice on the definition of relevant market for the purposes of community competition law. Competition law financial definition of competition law. Since cartels are illegal, they are generally highly secretive and evidence of their existence is not easy to find. This entry surveys recent analytical work that has called the market definition paradigm into question on a number of fronts. Singlefirm conduct under section 2 of the sherman act. Legislation enacted by the federal and various state governments to regulate trade and commerce by preventing unlawful restraints, pricefixing, and monopolies. Competition law is a body of business law that regulates market competition between companies. Information and translations of competition law in the most comprehensive dictionary definitions resource on the web. The paper starts with an analysis of competition law by examining the way competition is interpreted in various jurisdictions. First of all, the basic concept of market definition in the aviation industry does not differ, at least concerning the essential characteristics, from the general concept of market definition that is used in competition law all over the world. Competition law meaning in the cambridge english dictionary.
The high court has delivered its second competition law judgment this year the first was flight centre, this time providing some important clarification to the meaning of market in australia. Competition is the rivalry between companies selling similar products and services with the goal of. Competition law is known as antitrust law in the united states for historical reasons, and as antimonopoly law in china and russia. Definition market power is the ability of a firm or group of firms within a market to profitably charge prices above the competitive level for a sustained period of time. Economics market definition aus competition law law.
Thus, unfair conduct of a dominant enterprise or the conduct of an enterprise to seek dominance unfairly monopolization is under scrutiny under the competition laws. Market definition and new dominance criteria for digital markets on 9 june 2017, the 9th amendment of the german act against restraints of competition arc entered into effect introducing important amendments for companies to german competition law. Illegal market sharing may involve allocating a specific percentage of available business to each producer, dividing sales territories on a geographic basis, or. Monopoly power, market definition, and the cellophane fallacy. Market definition in eu competition law edward elgar publishing. The official website of the federal trade commission. William cook global law professor, university of michigan law school. It is also known as antitrust law or antimonopoly law.
Competition law is a law that promotes or seeks to maintain market competition by regulating anticompetitive conduct by companies. We discuss types of anticompetitive practices and their effect on the market. In competition law, a relevant market is a market in which a particular product or service is sold. But as well see in the later lectures, and as runs through competition law, agreeing a definition of the relevant market becomes central to understanding whether or not potential behavior does indeed distort, or potentially distort, competition on the market. Market definition is a tool to identify and define the boundaries of competition. The definition of the relevant market is distinctly important with regards to the application of the competition law rules. It is only in a twosided nontransaction market with only one externality that one could safely perform a market definition exercise on the side of the market that exerts no externality on the. In eu competition law, the approach to define markets are specified in the notice of the european commission on the definition of the relevant market adopted on 9 december 1997.
This paper considers how competition law can reconcile the legal concept of the. These laws stabilize the market condition by regulating the monopoly and unfair business practices. Competition law legal definition of competition law. Relevance of the relevant market to eu competition law provisions.
Market definition in the aviation industry aviation and. Meaning of antitrust or competition law as a finance term. The enforcement of the provisions of competition law. These arrangements are essentially agreements not to compete. This historical perspective allows us to understand that competition law can be, and was, applied without market definition, and to duly frame the discussion about why it is so important to have an objective, predictable, single method of market definition. In eu competition law, the approach to define markets are specified in the notice of the european commission on the.
It begins by providing an overall summary of the case law on the basic concept of product market and the principles for its delineation. Nov 29, 2017 in competition law, a relevant market is a market in which a particular product or service is sold. The enforcement of the provisions of competition law would be not possible without referring to the market where competition takes place. Market definition is integral to a competition authoritys ability to sanction anticompetitive practices under article 102 tfeu. Mobile communications sector analysis defining markets in the digital age background the debate key concepts key concept 1 market definition in practice. Dec 01, 2004 all references to issues of legal assessment and procedure in investigations under the competition act 1998 ca98 must be read in the light of competition act 1998.
Market definition and market power in competition analysis. By the term market is also understood the demand there is for any particular article. Market division or customer allocation federal trade commission. Market definition provides a framework for competition analysis. Prohibiting contracts which severely limit trade or commerce. The definition of the relevant market concerns product and geographical aspects.
The definition of a relevant market is a tool to identify and define the. The main purpose of market definition is to identify in a systematic way the competitive constraints that the undertakings involved 2 face. David brewster, market definition and substitutability australian courts continue to struggle with part iv of the trade practices act 1974 cth 1996 12 qutlj 246263. Market definition is needed in order to distinguish between the different areas in which companies compete with each other. Squire patton boggs competition law and regulation in the u. While it is not an aim in itself, the definition of the relevant market serves as a tool in establishing the basic ground for the competition rules to assess the competition in a given market. There are two fundamental dimensions of market definition.
The starting point in any type of competition analysis is the definition of the relevant market. Market definition provides an analytical framework for the ultimate inquiry of whether a particular conduct or. In this book, the first comprehensive, unifying view of market definition, miguel ferro adeptly explores the different economiclegal issues that arise in eu. Market concentration measures the extent to which market shares are concentrated between a small number of firms and it is usually taken as a proxy for the intensity of competition. Indeed, in recent years changes in concentration have increasingly been used to argue that the intensity of competition is. Market division or customer allocation plain agreements among competitors to divide sales territories or assign customers are almost always illegal. Market definition is an important step in building an antitrust case or investigating a market for anticompetitive harms. Market definition in eu competition law provides a crucial introduction to the topic and will be an important resource for students and scholars of european competition law. Therefore, the relevant market is the market where the competition takes place. Market definition has long held a central place in competition law. Competition law promotes and maintains market competition within the territorial boundaries of a country. This paper aims to introduce the concepts of market definition and market power.
Market definition in eu competition law new horizons in competition law and economics miguel sousa ferro on. By defining a wider market for data, a form of potential competition can be taken into account whereby market players also compete for the asset that is used as an input to develop or improve services offered on online platforms. Robertson abstract in competition law, the relevant market acts as a filter which delineates that part of commerce within which competition law assesses companies market behaviour. Market definition provides an analytical framework for. Issues and case studies provides a comprehensive analysis of the issues involved in defining markets in antitrust cases. A description of how market definition developed and gradually imposed itself in competition law, originally in the usa and then in the eu. In this post i would like to give you a brief overview of the concept of market definition in the aviation industry. It is the intersection of a relevant product market and a relevant geographic market. Definition of antitrust or competition law in the financial dictionary by free online english dictionary and encyclopedia.
So, what does competition mean in the field of marketing. Market definition in eu competition law new horizons in. Practitioners and judges will also benefit from the extensive analysis of case law and the practical examples. The basics of competition law in the uk by pinsent masons. Firms involved in anticompetitive behaviour may find their agreements to be unenforceable and risk being fined up to 10% of group global turnover for particularly damaging conduct as well as exposing themselves to possible damages actions. Market definition is a tool to identify and define the boundaries of competition between firms. Pdf on sep 27, 2006, jurgita malinauskaite and others published product market definition in competition law. The enforcement of the provisions of competition law would be. The notion of relevant market is used in order to identify the products and undertakings which are directly competing in a business. For example, market shares can be calculated only after the. The goal is to define a relevant market so that other things like concentration levels, market power, and market shares can be determined.
Section 52 of the competition act 1998 obliges the oft to prepare and. Commission notice on the definition of the relevant market for the purposes of community competition law official journal c 372, 9. Market definition is one of the most fundamental concepts underpinning essentially all competition policy issues, from mergers, through dominancemonopolisation to agreements. However, in competition law practice, the concept of relevant market is somewhat different from market concepts used in other areas. What does antitrust or competition law mean in finance.
1186 1047 441 41 1335 1253 458 33 366 155 156 839 1319 587 1337 1304 1107 1157 1033 144 1590 405 770 538 628 907 745 1373 285 1638 18 251 1150 568 1225 334 1278 481 427 1125 970 78 1267 1276 491 945