Refers to the market analyzed by courts and/or competition and antitrust agencies in evaluating whether a competitor is dominant or has market power, which is the first step in analyzing the potentially anticompetitive effects of allowing a merger to proceed and often a key step in determining whether such a competitor has violated a competition or antitrust statute, such as abuse of a dominant position.
Given its central importance in the analysis of competition and antitrust issues, determining the relevant market is often characterized by the divergent views of “dueling” economic experts. In controversial mergers it also often ends up being a “football” that the competition and antitrust authorities, the merging companies and those opposing the merger kick back and forth, each pressing a definition that suits their purposes and objectives.
Because the definition of “relevant market” is very mutable and small and subtle changes can dramatically change the competitive analysis of a case, whether a current set of U.S. Federal Trade Commission Commissioners or the Antitrust Division define markets broadly or narrowly is a key way of loosening or tightening antitrust enforcement and therefore whether they are pro or anti-consolidation, and so reflects the views of an incumbent administration. See HHI.