Relevant Market

Ewelina Huzarska

Description of one of relevant markets.

In order to describe the relevant market of one products we should understand what the relevant market is. We can find many definitions of market and relevant market. Starting with market definition we can say that this is an area (physical or virtual) of goods exchanging, where sellers are offering certain quantity of goods in certain price directly or indirectly. This repeating transactions held in legal and social environment.

More important from market definition is to define the limits of that market - market delineation. Relevant market is a key term in competition low, when Authority needs to adjudicate on competition cases. Authorities can assess if company's market share is below market share thresholds set out in certain block exemptions and whether the enterprise is not possessing market power individually. It is also important for companies, to define market shares, when considering the potential for new entry or to calculate market power.

We can define relevant market as a goods (products or services) in a given geographic area that operate as a competitive constraint on choice of suppliers of those goods. All definitions of relevant market, also Competition Authorities and European Commission approach, use a concept of the relevant market that combines two components: the relevant product market and the relevant geographic market.

Relevant product market contain all those products (or services) which customer is considering as interchangeable or substitutable by the reason of products characteristics, price and intended use. For the producer the relevant product market include all suppliers who can with their existing facilities , switch to the production of substitute goods.

The relevant geographic market is the territory in which the producers can impose competitive constraints on each other. In which the conditions of competition are sufficiently homogeneous and which can be...