The European Commission has published today a public consultation on the Market Definition Notice used in EU competition law. The open questionnaire will contribute to the Commission’s evaluation of the Notice to assess whether it requires updating. Stakeholders can submit their views and respond to the open public consultation until 9 October 2020.
Commissioner Margrethe Vestager, in charge of competition policy, said: “EU competition rules must remain fit for a world that is changing fast and is increasingly digital. The Market Definition Notice provides key information to companies and other stakeholders, helping them to understand the Commission’s approach on how the market works. It is important that the guidance the Commission gives is up to date and that it sets out a clear and consistent approach to market definition in a way that is easily accessible. We want to have an open dialogue and exchanges with all relevant stakeholders for the Commission to understand any concerns about definitions on how the market works and if the notice needs to be updated.”
The need for the evaluation
Over the past few years, change is happening at an ever more rapid pace, and the world is becoming increasingly digital and interconnected. Changes such as the increase in global trade, including with major emerging markets, the progressive elimination of national barriers to commerce within the single market, digitisation, and the rise of major new players in some sectors, mean that many markets may work differently today than they did in the past.
The current Market Definition Notice dates from 1997 and may therefore not address all pertinent questions arising today when defining the relevant product and geographic market. The Commission has also gained a lot of experience in market definition all these years, techniques have evolved and the EU courts have provided additional guidance.
The best practices that can be distilled from these developments may need to be reflected in a revised Market Definition Notice, and the Commission is seeking stakeholders’ feedback on this.
The information collected through the public consultation will provide part of the evidence to be used in the evaluation. The Commission will also carry out research into best practices in market definition; exchange views with national competition authorities within and outside the EU; and proactively engage with experts and representatives from stakeholder groups.
The Commission is consulting stakeholders from the public and private sector, including, undertakings and consumer associations, competition authorities and government bodies, academia, as well as legal and economic practitioners. Respondents are invited to submit their views and to respond to the open public consultation until 9 October 2020 in any official EU language. The Commission aims at publishing the results of the evaluation in 2021.
Market definition is a tool to identify the boundaries of competition between undertakings. The objective of defining the relevant product and geographic market is to identify the actual competitors that constrain the commercial decisions of the undertakings concerned, such as their pricing decisions. It is from this perspective that the market definition makes it possible, among other things, to calculate market shares that convey meaningful information for the purposes of assessing market power.
Market definitions reflect market realities. Therefore, they differ across sectors and may evolve over time. Geographic market definitions, for instance, may range from national or local markets – such as for the retail sale of consumer goods – to global markets – such as for the sale of aviation components. As market realities evolve over time, the Commission’s market definitions also evolve over time.
The Market Definition Notice provides guidance on the principles and best practices of how the Commission applies the concept of relevant product and geographic market in its enforcement of EU competition law.
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