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

A market is defined in three dimensions: product, space and, possibly, but more rarely, time. The market is assessed for the time the facts took place . Although the Commission must carry out an evaluation of the structure of the market and of the state of competition at the time it takes its decision, it is not under any obligation to analyze the relevant market in every case . Conversely, the Co …

Market dimensions

A market is defined in three dimensions: product, space and, possibly, but more rarely, time. The market is assessed for the time the facts took place . Although the Commission must carry out an evaluation of the structure of the market and of the state of competition at the time it takes its decision, it is not under any obligation to analyze the relevant market in every case . Conversely, the Commission is not bound by the assessments of the relevant markets carried out in its earlier decisions, but can take them into account during its analysis as a relevant factor among others if there is nothing to indicate that the conditions of competition on the relevant markets have substantially changed . 

When two distinct relevant markets are interdependent, the Commission uses the concept of a two-sided market to explain their functioning. The two-sided market is characterized by interactions of at least two types of economic agents leading to network externalities, which correspond to a situation in which the economic activity of one operator - consumption or production - has a positive or negative effect on the welfare that another agent can derive from its own activity, without this influence being transmitted through a market mechanism or translated into a monetary transfer. The general search service market has a two-sided nature i.e. a market  in which suppliers simultaneously respond to two distinct demands from  different types of service user: on the one hand that of internet users wishing to  compare features and prices of products before ultimately making a  purchase, and, on the other, the demand of those wishing to sell their products who feed information about those products into suppliers’ databases for the purposes of such comparisons with a view to their products being purchased by internet users, although any transaction  between buyer and seller will take place, if at all, on a different market .

In its new communication on the definition of the relevant market, the Commission devotes specific attention to market definition in the presence of multi-sided platforms (pts. 94 et seq.). In such circumstances, the platforms in question encourage interactions between different groups of users, creating a situation in which the demand of one group of users influences the demand of other groups, and where the reaction of one group to a change in supply conditions may also affect other groups, thus giving rise to feedback loops between the different sides of the platform, or indirect network effects, generally internalized by the platforms when they set their supply conditions. 

In the case of multi-sided platforms, the Commission may define a relevant product market for the products offered by a platform as a whole, so that it encompasses all (or several) user groups, or separate  (albeit related) relevant product markets for the products offered on each side of the platform. 

The Commission recognizes that the presence of indirect network effects may make the assessment of demand substitution and, in particular, the application of the “SSNIP” test more difficult than in situations where there is no such interdependence between user groups.

It goes on to say that the fact that multi-sided platforms provide one group of users with a product at a zero or even negative monetary price, in order to attract users to products offered on other sides of the platform and to monetize their products on these sides, does not imply that there is no relevant market for this product (pt. 97). In such cases, parameters other than price are particularly relevant to the assessment of substitutability, in particular product functionality, intended use, evidence of past or hypothetical substitution, barriers to or costs of switching suppliers, interoperability with other products, data portability and so on. Instead of the SSNIP test, the Commission may use the SSNDQ test to assess the switching behavior of customers of the zero-price product in response to a slight but significant and non-transitory reduction in quality (pt. 98).

Commission Decision No 97/181/EC of 18 December 1996, Concerning the conditions imposed on the second operator of GSM radiotelephony services in Spain, LawLex200400002905JBJ.

Case T-66/01 Imperial Chemical Industries Ltd [2010], LawLex201000001303JBJ, particularly when ruling to ensure the enforcement of a judgment.

Case T-99/14 Topps Europe Ltd, Judgment of 11 January 2011, LawLex201700000067JBJ.

Case T-612/17 Google Alphabet, Judgment of 10 November 2021, LawLex202100005855JBJ.

Commission Notice pt. 95: “(...) Depending on the facts of the case, it may be more appropriate to define  separate markets where there are significant differences in the  substitution possibilities on the different sides of the platform. To  assess whether such differences exist, the Commission may take into  account factors such as whether the undertakings offering substitutable  products for each user group differ, the degree of product  differentiation on each side (or each user group’s perception thereof), behavioral factors such as the homing decisions of each user  group and the nature of the platform (for instance whether it is a  transaction or a matching platform). In either case, the Commission  takes into account, where relevant, the indirect network effects between  user groups on different sides of the platform when defining the  relevant markets or in the competitive assessment”.

European Competition Law

142. Market dimensions

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

142. Market dimensions

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise