A cost-effective method to aggregate non-substitutable goods within the same relevant market

A cost-effective method to aggregate non-substitutable goods within the same relevant market

By Julien Pellefigue and Paul Le Coz

The definition of the relevant market is a crucial step in competitive analysis as it helps calculate the market share of each players and obtain an indication of their market power. Conventionally, two properties are aggregated in the same relevant market when they are substitutable from the demand point of view, that is to say when they meet the same overall need. In some cases, mainly for practical reasons, however, it happens that non-substitutable goods are aggregated in the same relevant market. While the law seems to give little specific guidance for this exercise, TERA Consultants has developed a quantitative approach based on the concept of transaction complementarity.

Other publications by TERA Consultants in Competition

• Delimitation principles of the "bundled market" boundary
• Anti-competitive practice of price discrimination in the residential mobile telephony market
• Opening the black box of transfer pricing to better articulate competition law and international tax law
• Mergers control: For a reconsideration of the structural analysis
• Les remèdes dans les opérations de concentration (download)