Definition of the Relevant Market: (Lack of) Harmony between Industrial Economics and Competition Law

The European Union has seen an expansion in the role and scope of economic analysis in competition policy over the last decade. Conformity of competition law with economic principles is manifested in numerous reforms recently implemented in various areas of competition policy, as well as in the â?~more economic approachâ?T towards European merger control. In the field of market definition, the transition to more economic-based methods was prompted by the promulgation of the 1997 Commissionâ?Ts Notice on the definition of the relevant market, which introduced an economic test to govern its market delineation procedure. Notwithstanding these developments, incorporating economic principles into the existing competition law framework remains a challenging task. Many â?~traditionalâ?T lawyers and judges appear reluctant to accept empirical evidence, often on the basis of insufficient data, which arguably hinders the use of quantitative tools. Furthermore, as the renowned dependency between law and economics in antitrust analysis intensifies, a correct application of the legal principles mandates a sound economic proficiency, not inevitably possessed by legal practitioners. The aim of this project is to achieve better integration of industrial economics and competition law in the market definition stage, which is a necessary prerequisite and often the centrepiece of most competition law inquiries, whilst indicating the relevant empirical evidence substantive to applying this framework in practice. It is investigated to what an extent the regulatory provisions utilised by the European Commission are aligned with the economic theory underpinning the definition of the relevant market, and whether the Commission properly utilises all quantitative techniques available to date.