EU ANTITRUST: HOT TOPICS & NEXT STEPS

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Prague, Czechia

improved the availability of the data needed to calculate a product specific price elasticity of demand. However, digitalisation has not directly changed the position of the relevant market definition in European competition law. It does not exclude its need - the relevant market can still be defined and used for other purposes in the competition law analysis. A product specific price elasticity of demand analysis does not rule out the possibility that competition authorities may also assess market shares and other relevant aspects in parallel, which would only add more validity to their conclusions about the existence or non-existence of a dominant position. As mentioned above, there is also a tendency to defend a market definition for the analysis of a dominant position with a reference to legal certainty. A market definition is presented as a common-sense approach, which the addressees of antitrust rules are capable of performing and which does not require an understanding of economics (Eben, 2019, p. 35; Carlton and Israel, 2010). On the other hand, it is claimed that with current globalisation and digitalisation trends, a market definition is very often far from an easy task for lay persons (European Union, 2012, para. 29). To test these conflicting hypotheses, the author performed brief pre-research among a small number of start-up companies. As a part of the pre-research, the author also tested whether the companies would be able to calculate their product specific price elasticity of demand. The pre research involved only eight participants. Hence, it is necessary to take the below information with caution. However, it provides an argument for further research. First, the responses show that the companies are confident in a “common sense” approach to market definition. All of the respondents estimated their ability to assess substitutability of their product on a 1-10 scale with 7 or higher (average 8.75). Nevertheless, only three out of eight respondents would be able to estimate what a small but significatory (10%) price increase would do to their own turnover (let alone the turnover to other potentially competing products). This shows that there might be a gap between a belief to define markets with common sense and actual ability to do so with quantitative measures (SSNIP test). Second, even if the respondents were able to define a relevant market correctly, they would not necessarily be able to estimate their market shares. Although seven of eight respondents were confident in estimating their market share, five respondents admitted that they would not be able to estimate total market size (in terms of turnover), which is needed for a standard market share calculation. 5. Pre-research in self-assessment of market position in dynamic industries

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