After receiving feedback in its recent public consultation on the draft revised Market Definition Notice, the European Commission is in the process of finalising its new Market Definition Notice.  Market definition is a key step in any competition law case, which means that the new guidance will be a point of reference for future cases. The draft notice helpfully reflects changes in practice in the last 20 years as a result of digitalisation, innovative ways of offering goods and services as well as the increasingly interconnected and globalised nature of commercial trade.

We were happy to see that the draft notice, published on 8 November 2022, included most of the points that we mentioned in a 2020 position paper.

Some observations

In this new consultation response on the draft notice’s text, we emphasized some further points. For instance, we welcome the EC’s approach in the specific case of forward-looking market definition assessments. Yet, the standard of proof for using forward looking analysis should be aligned with the one for the substantive analysis in merger control cases.

Regarding the parameters of competition, the EC should continue to stress the importance of price as the key determinant of market definition, while elaborating on the circumstances in which non-price parameters of competition are relevant for assessing demand substitution for price-based products on the market.

We also welcome further clarification for market definition in multi-sided markets and in the presence of significant investment, as well as metrics for innovation and bid markets. 

Our full recommendations can be found in Linklaters’ response to the Commission’s consultation.

Next steps

The EC will finalise and revise the draft based on its review and the feedback received, with a view to having a new Market Definition Notice in place in Q3 2023.