European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

Compared to elasticity of demand, supply elasticity, which enables the measurement of the capacity of other suppliers to meet the demand for goods supplied by the alleged dominant undertaking, has always been regarded by EU authorities as a complementary factor in defining the relevant market . The Court of Justice has clarified that the interchangeability or substitutability of products are natur …

Market definition and elasticity of supply

Compared to elasticity of demand, supply elasticity, which enables the measurement of the capacity of other suppliers to meet the demand for goods supplied by the alleged dominant undertaking, has always been regarded by EU authorities as a complementary factor in defining the relevant market . The Court of Justice has clarified that the interchangeability or substitutability of products are naturally dynamic, in that a new supply of products may alter the conception of the products considered to be interchangeable with a product already present on the market or as substitutable for that product and, in that way, justify a new definition of the parameters of the relevant market . As it is an indication for the measure of potential competition, supply elasticity is particularly relevant with regard to emerging markets. 

According to the Notice on the definition of relevant market, substitutability may be analyzed from the supply-side when its effects are equivalent to demand-side substitutability in terms of immediacy and effectiveness  and when it leads to similar conditions for the products concerned . It is a secondary criterion to demand elasticity and aims to assess the capacity of other suppliers to meet the demand for goods supplied by the alleged dominant undertaking. Two products will be considered as substitutable from the supply side where suppliers are able to redirect their production from one type of product to another , by simple adaptation, without incurring risk or unsustainable costs. When passing from one type of production to another necessitates heavy investments or a revisal of strategy  or there are barriers to entry, such as legal  or technological  requirements, the products in question belong to distinct markets .

Commission Notice No C/2024/1645 on the definition of relevant market pt 37 et seq. According to the notice, at pt 23, elasticity of supply is not taken into consideration ”where supply substitution would entail the need to significantly adjust  existing tangible and intangible assets outside the regular course of  business; to incur more than insignificant additional investments, sunk  costs or risks; to take strategic decisions of a lasting nature, or to incur time delays".

Case C-307/18 Generics (UK) Ltd, Judgment of 30 January 2020, LawLex202000000131JBJ: where a manufacturer of originator medicines containing an active ingredient which is in the public domain, but the process of manufacturing which is covered by a process patent, the validity of which is disputed, impedes, on the basis of that process patent, the market entry of generic versions of that medicine, there must be taken into consideration, for the purposes of definition of the product market concerned, not only the originator version of that medicine but also its generic versions, even if the latter would not be able to enter the market legally before the expiry of that process patent, if the manufacturers concerned of generic medicines are in a position to present themselves within a short period on the market concerned with sufficient strength to constitute a serious counterbalance to the manufacturer of originator medicines already on that market.

Case T-671/19 Qualcomm, Judgment of 18 September 2024, LawLex202400006537JBJ: the definition of the relevant market presupposes that there is a sufficient degree of interchangeability between the products or services which form part of it and those which are envisaged to meet the demand on this market, such being the case if the author of the alternative offer is able to meet the demand in the short term with sufficient strength to constitute a serious counterweight to the power held by the undertaking concerned on this market.

See Commission Notice No C/2024/1645, pt 23, b).

ECJ See also Case 22/78 Hugin v Commission [1979] ECR 1869, LawLex200400002970JBJ.

Case T-65/96 Kish Glass v Commission [2000] ECR II-1885, LawLex200400002973JBJ; Case C-333/94 Tetra Pak v Commission [1996] ECR I-5951, LawLex200400002897JBJ; Case 322/81 Michelin v Commission [1983] ECR 3461, LawLex200400002959JBJ; Commission Decision No 2003/707/EC of 31 May 2003, Deutsche Telekom AG, LawLex200500004521JBJ; No 2007/53/EC of 24 March 2004, Microsoft, LawLex200500004763JBJ.

Commission Decision No 2001/463/EC of 20 April 2001, Der Grüne Punkt - Duales System Deutschland (AG), LawLex200400002640JBJ.

Commission Decision No 2007/53/EC of 24 March 2004, Microsoft, LawLex200500004763JBJ; Case T-201/04 Microsoft v Commission [2007] ECR II-3601, LawLex200700001486JBJ.

More marginally, assessing supply elasticity when defining the market must also take into consideration potential competition from large buyers capable of manufacturing their own products: Case 6/72 Europemballage Corporation and Continental Can Company v Commission [1973] ECR 215, LawLex200400002771JBJ. - However, this potential competition is unlikely when the investments necessary for integrated manufacturing are very significant and  the dominant group has a technological advance: Commission Decision No 72/21/EEC of 9 December 1971, Continental Can Company (not available in English).

European Competition Law

140. Market definition and elasticity of supply

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140. Market definition and elasticity of supply

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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