Implications of the 2024 Market Definition Notice
Year: 2025
Type: article
Abstract: Market definition provides competition law with a basic unit of analysis that has a strong guiding force on the substantive competitive assessment carried out in due course. Particularly when it comes to innovative1 and digital markets,2 this legal concept3 has been in search of a more suitable approach to delineating the relevant antitrust market for quite some time.4 In Europe, the European Commission’s 1997 Market Definition Notice5 was recently overhauled to address the challenges of the 21st century, resulting in the revised 2024 Market Definition Notice.6 This Special Issue brings together a number of papers that explore the implications of the European Commission’s 2024 Market Definition Notice, from both a legal and an economic point of view. A great many of these papers were discussed at a Workshop held in Vienna on 20 November 2024, which was co-organized by the University of Glasgow, CREATe, the Vienna University of Economics and Business (WU Vienna) and The Competition Law Hub.7 To set the scene, Terézia Ovečka shares her insights into the main achievements and novelties contained in the revised Market Definition Notice. As a case handler at the European Commission’s Directorate-General for Competition, but writing in her personal capacity, she points to several important innovations in the Notice, including those related to R&D activity, digital markets, differentiation, and non-price parameters. Many of these are taken up in the subsequent contributions to the Special Issue. The 2024 Market Definition Notice introduces new terminology into market definition that has gained some prominence over the past decade. One of these terms is the (digital) ecosystem. Several papers address this new aspect in the Notice. While the Notice only refers to it in one paragraph, the contributions highlight how this concept is still evolving and may have an important role to play in years to come. In their contribution, Joanna Mazur and Antoni Napieralski explore the meaning of ‘ecosystem’ in the Commission’s decisional practice and the European Union (EU) Courts’ jurisprudence. They carry out an empirical as well as a qualitative assessment that shows how this concept has evolved over time and is still, to a certain degree, in search of meaning. With the reliance on the ecosystem concept increasing across jurisdictions, Emanuela Lecchi’s contribution zooms in on two merger cases that were decided in the EU and the UK, respectively, with opposing outcomes: Microsoft/Activision and Booking/eTraveli. She shows how different market definitions had repercussions on the substantive analysis in these cases and concludes that this may lead to judicial scrutiny. She argues for a system market approach, as this allows for the incorporation of ‘access points’ into the analysis. Still connected to digital ecosystems, Annika Stöhr and Oliver Budzinski analyse the dynamics of market boundaries. Among others, they find that the orchestrators of digital ecosystems can rely on a specific kind of market power—which they term systemic market power—to actually shift market boundaries. This, they argue, can be seen as an expression of their market power that should be taken into account in the competition analysis. The interest in ecosystems in market definition is closely matched by the excitement around ‘innovation’ and ‘innovation spaces’ in the 2024 Notice. Much ink has been spilled trying to dissect the meaning of innovation and the extent to which an ‘innovation space’ fits within existing product market definition principles, and yet significant questions remain. In her contribution, Anouk van der Veer considers market definition in times of systemic change—change that affects the overall functioning of the economy. She draws a distinction between dynamic competition, the economic reality in which companies compete to drive or respond to the transformation of markets, and dynamic analysis, the form of analysis that captures the process of change as it happens. She dissects these concepts and suggests principles for market definition. She offers a critique of the 2024 Notice, praising the inclusion of structural market transitions as a concept, while regretting the lack of guidance on forward-looking assessment in practice and the excessive focus on demand-side substitution. Hedvig Schmidt continues the reflection, foregrounding the role of intellectual property (IP) rights within the 2024 Notice. She argues that the 2024 Notice’s treatment of IP and innovation is inconsistent with other EU instruments, such as the 2014 TTBER, the new R&D BER, and the Draft Guidelines on Article 102 TFEU, as well as with US approaches. She identifies a recent move from a Schumpeterian to an Arrowian approach in competition authorities’ consideration of the relationship between competition and innovation. This is particularly relevant to IP, given competition law’s tendency to act as a second-tier regulator of IP rights. While praising the 2024 Notice’s refined consideration of innovation and IP rights, she warns that there is a risk that competition law crosses the line into undermining the function of IP law itself. Another concept that gains more prominence in the 2024 Notice is the concept of homogeneous conditions of competition (HCC). While the 1997 Notice very strongly focused on the hypothetical monopolist test (HMT), Lirio Barrios, Timo Klein, Sophie Kümmel, and Ilaria Noviello show that the new Notice now expands the HCC—which was previously referred to in the context of geographic market definition—to situations in which companies sell their products under discrimination. This, they argue, can shift the focus of market definition and lead to different outcomes that must also be reflected in the subsequent competitive analysis to ensure coherence. While the 2024 Notice introduced several new concepts, Jan Broulík notes that there is a conspicuous absence: labour markets. In his contribution, he sets out why a competition authority that has the aim of ensuring fair competition in labour markets must start by defining a market for labour. He then proceeds to analyse how such a market definition could take place and what implications it could have. The legitimacy of market definition depends on applying logical and practical methods. On that front, Helen Ralston-Smith and Gunnar Niels offer a practical and conceptually rigorous guide to market definition for multi-sided platforms. They praise the 2024 Notice for recognising the importance of network effects and for outlining various approaches to multi-sided market definition. At the same time, they note that the 2024 Notice leaves some questions unresolved—particularly regarding whether to define one or multiple markets and the relevance of non-price dimensions. They therefore offer their insights into a clearer analytical framework, grounded in a detailed analysis of the case law. As first cases applying the 2024 Market Definition Notice are being decided, the issues discussed in the contributions to this Special Issue will certainly arise—and the interpretive solutions and suggestions presented in them may provide a path forward. Conflicts of interest: In line with the ASCOLA Transparency and Disclosure Declaration, we state that we have no conflicts of interest to declare.
Source: Journal of Antitrust Enforcement
Authors: Magali Eben, Viktoria H S E Robertson
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $4,533
OpenAlex ID: W7124465323
FWCI:
Cites:
Cited by:
Related to: