Relevant market

What is Relevant Market

Relevant market refers to the product and geographic space within which competitive constraints are assessed under competition law. It acts as the analytical boundary for determining market power and competitive harm in competition analysis. The concept serves as a foundational framework for competition authorities like CCI for assessing whether an enterprise possesses market dominance and whether its conduct may result in appreciable adverse effects on competition.

Defining the relevant market is crucial for competition law enforcement as it establishes the scope within which market power is measured and competitive effects are evaluated. This determination directly influences the assessment of dominance, abuse of dominance, and anti-competitive agreements under competition law frameworks across jurisdictions. The relevant market is identified primarily through the substitutability of products or services and the geographic scope within which competitive conditions are sufficiently homogeneous, through the use of various economic tools such as demand-side substitutability, supply-side substitutability, and the hypothetical monopolist test (SSNIP test). It is, however, important to note that defining the relevant market is not an end in itself but rather a regulatory construct instrumental to assessing market power and competitive effects, influencing enforcement decisions, merger review, and antitrust litigation.

Official Definition of Relevant Market

Relevant Market as defined under the Competition Act, 2002

The definitions of "relevant market", "relevant geographic market", and "relevant product market" under the Competition Act, 2002 are set out in Sections 2(r), 2(s), and 2(t) respectively, and are foundational to the enforcement of competition law in India.

Section 2(r) of the Act defines "Relevant market" to be meaning the market which may be determined by the Commission with reference to the relevant product market or the relevant geographic market or with reference to both these markets. This enables the CCI to analyze markets flexibly, taking into account either the product or the service dimension, the geographic dimension, or their intersection depending on the facts of the case. The need to consider both relevant product market as well as relevant geographic market is further reiterated under section 19(5) of the Act.

Section 2(s) of the Act defines "Relevant Geographic Market" to be meaning a market comprising the area in which the enterprises that provide a relevant product or service are located or are likely to be located and the consumers for such product or service are found. This emphasizes that the relevant geographic market is not only a physical or administrative territory but a delineated area characterized by distinctly homogeneous conditions of competition in relation to the supply and demand of particular goods or services. The boundaries of this market are drawn such that competitive conditions within it differ noticeably from those in neighboring areas. In determining the relevant geographic market, the Competition Commission of India (CCI) considers various factors, including regulatory trade barriers, local specification requirements, national procurement policies, availability of distribution facilities, transportation costs, language, consumer preferences, and the need for secure and regular supplies or rapid after-sales service (see section 19(6)). These factors collectively help define the market’s geographic scope, reflecting real competitive dynamics rather than arbitrary borders.

Section 2(t) of the Act defines "Relevant Product Market" as a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use. The statutory language in this definition underscores that the concept of the relevant product market is grounded primarily in the economic principle of substitutability. In practice, CCI refers to the key factors listed under section 19(7) of the Act, namely physical characteristics or end-use of goods or the nature of services, price of goods or service, consumer preferences, exclusion of in-house production, existence of specialised producers, classification of industrial products, switching costs, customer base and categories, etc., while determining the relevant product market for a product or service under consideration.

Relevant Market as defined in International Instruments

OECD Market Definition Discussion Paper

CCI has an observer status in the Competition Committee of the OECD. The OECD discussion paper by the OECD Competition Committee defines market definition as an essential tool for identifying competitive constraints on firms by delineating homogeneous product and geographic boundaries. Central to this is the hypothetical monopolist or the Small but Significant Non-transitory Increase in Price (SSNIP) test, which assesses whether a small, sustainable price increase is profitable without customer loss. This test captures demand and supply-side substitutability to precisely frame the relevant market. However, the OECD highlights market definition's limitations in dynamic, differentiated, multi-sided, and auction markets, urging complementary methods like price-pressure indices and merger simulations. Jurisdictionally, market definition varies from a strict legal requisite to a flexible analytic approach integrated within competition enforcement. Market definition remains foundational but evolving, balancing theoretical rigor with practical complexities in competition analysis.

International Competition Network (ICN) Recommendations

The International Competition Network (ICN) is a virtual international organisation and its member represents competition authorities across the globe. CCI is a member and has been an official invitee to the conferences and workshops organised by the ICN. ICN recommends that agencies generally should assess the competitive effects of a merger within economically meaningful markets. A relevant market consists of a product or group of products and a geographic area in which it is produced or sold that could be subject to an exercise of market power. In the context of unilateral conduct as well, defining a relevant market generally provides a good starting point for the assessment of dominance, as it helps an agency to understand the scope of competition and the competitive constraints that limit a firm’s ability to exercise market power.

Relevant Market as defined in case laws

Indian case law on relevant market and market definition under competition law demonstrates a nuanced and evolving understanding shaped by the factual and sectoral complexities of the markets in question, especially in sectors like e-commerce.

Cases relating to Geographic Market Differentiation

Jak Communications v. Sun Direct

In this case, the CCI found that Direct-to-Home (DTH) services, with a pan-India signal footprint, represent a different geographic market from regional cable distribution limited by territorial wired networks. However, dissenting opinions have argued for linguistic and regional nuances that may narrow geographic scope, reflecting the complexity of India’s multilingual and geographically fragmented markets.

Cases relating to Offline vs Online Market Substitutability

Ashish Ahuja v. Snapdeal

In this case, the CCI has for the first time highlighted the distinction between offline-online markets. However, it ruled that both markets distribute the same product and are interchangeable in nature. The CCI further noted that both offline and online markets differ in terms of discounts and shopping experience and buyers weigh the options available in both markets and then decide accordingly. If the price in the online market increases significantly, then the consumer is likely to shift towards the offline market and vice versa.

Cases relating to Narrow Platform-Specific Market Definition

Matrimony.com Ltd. and Consumer Unity and Trust Society vs. Google LLC

In this case, the CCI highlighted the existence of a multi-sided nature of Google’s business model of bringing internet users, content providers and advertisers together. A separation was also drawn between the online general search market and online general search advertising market on the basis of non-substitutability, highlighting the significance of substitutability in defining the relevant market.

Cases relating to Multi-sided Digital Platform Markets

All India Online Vendors Association v. Flipkart

In this case, the CCI defined relevant markets narrowly for the first time. The CCI order narrowed the scope of the ‘relevant market’ in relation to platform markets and accepted the relevant market defined by AIOVA as the ‘services provided by online marketplaces for selling of goods in India.’ However, the CCI remarked that the e-commerce market being a recent phenomenon, is still an emerging concept and has also led to offline retailers entering into partnerships with e-commerce companies in order to attract consumers and thereby acknowledged the complementary nature of both these markets.

Lifestyle Equities v. Amazon

In this case, the CCI reiterated that online platforms possess unique characteristics, notably cross-sided network effects where sellers prefer platforms with a large buyer base, and buyers, vice versa. In the context of allegations concerning online sale and purchase of fashion merchandise, the CCI delineated the relevant market as the “market for services provided by online platforms for selling fashion merchandise in India.” However, it emphasized that relevant market delineation and competitive assessment must reflect the prevailing market realities at the time of evaluation, considering all relevant facts and allegations. The CCI further acknowledged that in rapidly evolving markets, such as this, market assessment should not be static but adaptive to changing conditions.

Umar Javeed v. Google LLC

In this case, the CCI adopted a nuanced and multifaceted approach to market definition, recognizing the complex and interdependent nature of digital markets. The Commission delineated multiple distinct but related product markets corresponding to Google’s varied digital services, including licensable operating systems, app stores, web search, browsers, and video platforms, rather than treating them as a single market. It distinguished licensable OSs from non-licensable ones like iOS, reflecting real-world substitutability constraints faced by OEMs. The geographic market was confined to India, accounting for its unique regulatory and consumer environment. Crucially, the Commission factored in network effects and ecosystem lock-in by analyzing how user, developer, and OEM interdependencies reinforced Google’s market power.

Types of Relevant Market

Types of relevant markets are usually classified along two intersecting dimensions: product and geography, with additional refinement for platform and multi‑sided markets. These categories are not watertight compartments. In practice they frequently overlap and are always analysed together rather than in isolation. For instance, a competition authority will rarely speak of a product market without simultaneously specifying its geographic scope (e.g. “market for licensable mobile operating systems in India”), and will often further qualify it by functional or platform features (e.g. “services provided by online platforms for selling fashion merchandise in India”). In multi‑sided and digital ecosystems, one and the same conduct may need to be examined across several interlinked relevant markets (such as the user‑facing side, the advertiser or seller side, and associated aftermarkets), so that any one market definition is meaningful only as part of a bundle of product–geography–platform delineations considered together. This cumulative, overlapping treatment ensures that market definition adequately reflects the real structure of competitive constraints, rather than treating each type of relevant market as a standalone or self‑sufficient category.

Relevant Product Market

A relevant product market consists of a set of products or services that are interchangeable or substitutable from the consumer’s perspective based on characteristics, price, and intended use, as reflected in Section 2(t) of the Competition Act, 2002. Defining a relevant product market involves a multifaceted assessment of several key factors that capture the competitive constraints faced by the products or services involved. The principal factors considered include:

• Product Characteristics: This involves assessing the physical attributes, quality parameters, and functional similarities of products or services. Products that are interchangeable or sufficiently similar in these respects may belong to the same relevant product market.
• Price Correlation: Pricing patterns and how consumers respond to price changes are critical. If a small price increase in one product leads consumers to switch to another, those products are likely in the same product market.
• Intended Use: The purpose for which the products or services are acquired and utilized is examined. Products fulfilling the same or sufficiently similar end-use tend to be grouped within the same market.
• Consumer Preferences: This includes behavioral patterns, brand loyalty, and switching tendencies. The extent to which consumers view products as substitutes and their willingness to switch significantly influences product market boundaries.

These factors are grounded in the legal framework under Section 2(t) of the Indian Competition Act, 2002, and further guided by Section 19(7), which directs the Competition Commission of India to consider these and other relevant elements depending on the case specifics. The interplay of these considerations reflects the fact-specific and economic nature of market definition, ensuring the delineated product market accurately reflects the actual competitive environment. Demand-side substitutability forms the primary basis for product market definition, supplemented by supply-side substitutability analysis where producers can readily switch production to alternative products.

Relevant Geographic Market

A relevant geographic market consists of the area in which conditions of competition are sufficiently homogeneous and distinguishable from neighbouring areas, corresponding to Section 2(s) of the Act (for example, city, state, regional, national markets). The market boundaries are not determined merely by physical geography but by the presence of consistent competitive factors within that territory.

Determining the relevant geographic market involves consideration of multiple factors, including transport costs, which affect the economic feasibility of moving products between regions; regulatory barriers that may legally restrict inter-regional trade; consumer mobility, reflecting consumers’ willingness and ability to source goods and services from alternative locations; pricing patterns and potential for arbitrage, indicating whether price differences facilitate or hinder cross-regional competition; and the availability and efficiency of distribution networks, which ensure product accessibility.

Geographic market boundaries are highly context-dependent and vary substantially across sectors and products, ranging from localized markets for perishable goods, where proximity is critical, to expansive national or even global markets for standardized commodities and digital services. Therefore, the relevant geographic market delineation is a dynamic, fact-specific assessment that plays a critical role in understanding where competitive constraints arise and how market power is exercised within particular territorial scopes.

International Experience

European Union

The European Union's market definition framework is central to its competition law enforcement, underpinning merger control, antitrust investigations, and abuse of dominance cases. The methodology is officially codified in the European Commission's Market Definition Notice, first adopted in 1997 and updated in 2024. Market definition in the EU involves identifying the relevant product and geographic markets. The core analytical approach relies on evaluating demand substitution (how easily consumers switch to alternative products), with supply substitution and potential competition considered at later stages of analysis. The SSNIP (Small but Significant Non-transitory Increase in Price) test is frequently used to assess whether a hypothetical monopolist could profitably raise prices, indicating the boundaries of competitive constraints. This framework enables the calculation of market shares and helps determine whether firms hold a dominant position under Article 102 TFEU or whether mergers would significantly reduce competition under the Merger Regulation. The Commission’s guidance also adapts these principles for evolving digital and platform markets, urging a flexible, evidence-based approach that accounts for multi-sided business models and rapidly changing market dynamics. Coordination with national competition authorities ensures harmonized enforcement across Member States, with the framework progressively refined to meet new challenges in both traditional and digital sectors.

The European Commission’s 2024 Notice on market definition modernizes and clarifies the role and methodology of relevant market delineation across EU competition law enforcement. The Notice reaffirms that defining the relevant product and geographic market is a structured tool primarily serving to identify the effective and immediate competitive constraints faced by undertakings. The framework retains the dual focus of a product market and a geographic market. Key methodological updates include:

• A systematic, evidence-based approach that prioritizes demand substitution as the primary criterion, supplemented by supply substitution in specific cases.
• Recognition that market definition is dynamically tailored to the facts, sector, and theory of harm at issue. While past precedents do guide the definition, they do not bind future analysis.
• Use of the SSNIP test (small but significant non-transitory increase in price) as a conceptual tool, while accepting that quantitative application is often replaced by a broader range of qualitative and quantitative evidentiary sources due to challenges in digital, zero-price, and rapidly innovating markets.
• Explicit guidance on challenges in digital and multi-sided platform markets, encouraging flexibility in demarcating markets where network effects, zero-pricing, and multiple interdependent user groups are present.
• Consideration of additional parameters of competition (such as sustainability, innovation, quality, and interoperability), reflecting contemporary policy priorities including the twin green and digital transitions.
• Clarification that market definition is an intermediate step, and the final assessment of market power or anti-competitive effects can (where appropriate) integrate constraints from outside the defined market, and the Commission may leave market boundaries open if findings are robust to alternative definitions.
• Increased transparency in evidentiary standards and a willingness to accommodate forward-looking evidence, especially for markets undergoing rapid technological or regulatory change.

United States

The 2023 Merger Guidelines, jointly issued by the U.S. Department of Justice and the Federal Trade Commission, reflect a significantly modernized and flexible approach to market definition in antitrust and merger review. Market definition under these guidelines serves as a practical, evidentiary tool to assess whether a merger is likely to substantially lessen competition or tend to create a monopoly, rather than as a strictly rigid prerequisite. The Guidelines emphasize that relevant markets consist of both product and geographic dimensions, which together delineate the area of effective competition.

The Agencies use three primary methods to define a market: direct evidence of competitive effects, application of Brown Shoe’s practical indicia (such as industry recognition, product characteristics, and consumer behavior), and application of the Hypothetical Monopolist Test, also known as the SSNIP test. Rather than exclusively relying on any single test or threshold, Agencies draw on an array of evidence, including ordinary course business documents, market structure, quantitative concentration measures (such as the Herfindahl-Hirschman Index), and direct testimony from customers or market participants. The new guidelines restore and formalize a structural presumption of illegality where a merger would significantly increase concentration in a highly concentrated market. However, the process is fundamentally dynamic and context-dependent. Agencies are permitted to define markets narrowly, sometimes excluding significant substitutes that do not closely constrain the merging parties, and to analyze harms in specialized settings such as labor markets, multi-sided platforms, input and cluster markets, and aftermarkets.

The Guidelines account for complexities in modern commerce like digital platforms, network effects, localized supply, differentiated products, and one-stop-shop models, often integrating structural and behavioral evidence to adapt their approach to market realities. The Agencies may also evaluate mergers in situations where market definition is difficult, relying directly on evidence of competitive effects or other indicia of rivalry and potential harm, thus sometimes proceeding without drawing sharp market boundaries at all.

Research engaging with Relevant Market

Research engaging within the Indian Context

The Conundrum of 'Relevant Market' by V Parthasarathi (2019)

This paper in the Indian Journal of Law and Technology critically examines the challenges of defining relevant markets in India's fragmented and multilingual media landscape, focusing specifically on the TV distribution sector. By analyzing a series of cases heard by the Competition Commission of India between 2011 and 2015, the paper explores conceptual and methodological difficulties arising from the coexistence of two technologically distinct distribution segments, wired Cable and wireless Direct-to-Home (DTH), and the role of linguistic diversity in shaping product and geographic markets. It highlights the complexity of applying traditional market definition principles in contexts where product characteristics, service areas, language preferences, and technological platforms intricately intertwine, calling attention to the need for nuanced and context-sensitive approaches to market delineation in India’s media economy.

Analysing the Indian approach to defining platform markets by S Bhattacharya & P Khandelwal (2022)

This paper critically examines how the Competition Commission of India approaches market definition in multi-sided platform markets. The authors highlight that traditional tests used for market definition often fail to capture the complex competitive dynamics operating across different sides of a platform. They argue that while the CCI has generally tended to define platform markets from only one side, academic literature supports a framework that accounts for interdependencies on all sides of the platform for a more accurate analysis. Applying this more comprehensive framework, the paper finds that the CCI overlooked certain sides of Google’s search platform, which limited its ability to assess harm to third-party content providers, and similarly neglected the multisided nature of Oyo’s platform, disregarding key sources of competitive power.

An Economic Analysis of the Effectiveness of Relevant Market Delineation Methods in Abuse of Dominant Position Cases in India by H Thakkar et al (2025)

This paper by Thakkar, Smacchi, and Subramaniam critically examines the current practices of relevant market delineation in abuse of dominant position cases under Indian competition law, highlighting the significant subjectivity and arbitrariness often involved. It discusses how the expanding diversity of online marketplaces, evolving e-commerce business models, and new determinants like network effects complicate market definition, leading to inconsistent adjudication. The authors analyze recent Competition Commission of India orders to illustrate these challenges and propose alternative approaches aimed at improving consistency and effectiveness in identifying relevant markets to better support fair competition enforcement in India.

Asymmetric Substitution vis-a-vis Relevant Market: A Conundrum Unresolved, Yatin Gaur and Priyal Jain (2022)

The blog explains that defining a “relevant market” under competition law — a core analytical tool for competition assessment — becomes especially tricky when substitution between products or services is asymmetric rather than symmetric. Under the relevant law in India (the Competition Act, 2002), the competition authority (Competition Commission of India, CCI) defines the “relevant product market” by considering whether goods or services are interchangeable or substitutable. However, substitution need not always be symmetric. That is, consumers may move from Product A to Product B, but not vice versa — for example when B is a “superior” or higher-quality version of A. In such cases, Product B constrains A, but A does not constrain B. This asymmetric substitution complicates market definition.

Research engaging beyond the Indian Context

Market definition: An Analytical Overview by JB Baker (2007)

This paper provides a comprehensive analytical overview of market definition as a foundational tool in antitrust law, emphasizing its crucial role in assessing market power and competitive effects. It explains why market definition should mainly focus on demand-side substitution while supply-side factors are more appropriately considered in later stages of competitive effects analysis. The paper critiques common pitfalls in market definition, such as reliance on price correlations or shipment data, and discusses challenges in dynamic or differentiated product markets. It outlines a practical application of the hypothetical monopolist test (SSNIP) and highlights the importance of tailored, evidence-based analyses sensitive to the facts and legal context of each case.

Market definition, market power by L Kaplow (2015)

This foundational paper critically examines the central concepts of market definition and market power within competition law, highlighting fundamental logical and practical challenges. Kaplow argues that market definition suffers from inherent difficulties that can make it infeasible or counterproductive, and that the common practice of using market share thresholds as proxies for market power lacks coherent empirical or policy justification. He further emphasizes that market power itself, while inseparable from competition law, is often misunderstood and misapplied, with its relationship to liability not clearly defined or supported by economic models. The paper proposes a ground-up analysis that considers both anticompetitive and procompetitive explanations to better understand the role of market power and calls for examining the social consequences of enforcement decisions to optimize antitrust policies.

Relevant market in competition law: a legal concept by VHSE Robertson (2019)

This foundational paper explores how the notion of the relevant market in competition law operates as a filter that defines the scope of commerce subject to competition law scrutiny. It argues that market definition exists on a spectrum between legal and economic perspectives, with economics sometimes playing a dominant but interpretive role depending on context. The paper emphasizes that the relevant market concept is a distinct legal construction rooted in economics, and this recognition challenges traditional views of both competition law and its shared economic concepts.

Defining Relevant Markets in Digital Ecosystems by DA Crane (2024)

This paper argues that traditional antitrust market definition based on product substitutability is inadequate for digital markets, where competition often occurs through single-sided market rivalry, ecosystem dynamics, and capacity races in emerging technologies. It calls for new analytical frameworks to account for these complex competitive interactions beyond classical market power assessments.

Data Challenges

The Competition Commission of India faces significant data and related challenges in defining relevant markets. These include the rapid evolution of digital and platform-based business models, which strain traditional metrics like assets and turnover embedded in existing laws. Limited data availability and lack of comprehensive regulatory frameworks complicate effective market segmentation, especially in sectors characterized by network effects, multisided platforms, and data-driven competition. Further challenges arise from coordination complexities with multiple sectoral regulators, delayed adjudications, political and resource constraints, and the intrinsic difficulty of capturing dynamic consumer behavior and rapidly changing market conditions in empirical data. These factors collectively hinder the CCI’s capacity to define markets with precision and enforce competition law efficiently in contemporary complex economic environments.