International Legal Perspective | A Comparative Analysis of Market Definition in the Context of Antitrust between China, the United States, and Europe
Published:
2025-01-02
在反垄断法的框架下，相关市场界定是评估企业行为是否构成垄断的核心环节。然而，中国、美国、欧洲在此问题上展现出了一定差异，不仅体现在各自构建的相关市场界定的法律体系上，还深入到指导原则、具体方法和实践案例之中。本文旨在通过对比分析这些差异，揭示其背后的法律逻辑、经济考量及实践挑战，以期为中国企业在国际市场中合规经营、有效应对反垄断审查提供有益的参考。
Under the framework of antitrust law, the definition of the relevant market is a core aspect of assessing whether corporate behavior constitutes a monopoly. However, there are certain differences among China, the United States, and Europe on this issue, which are reflected not only in the legal systems they have constructed for defining relevant markets but also in guiding principles, specific methods, and practical cases. This article aims to reveal the underlying legal logic, economic considerations, and practical challenges behind these differences through comparative analysis, in order to provide useful references for Chinese enterprises to operate in compliance with regulations and effectively respond to antitrust reviews in the international market.
I. Definition of Relevant Market in China's Antitrust Law
(1) Legal Basis for Defining Relevant Market in China
In China, the definition of the relevant market is mainly based on the "Anti-Monopoly Law of the People's Republic of China" (hereinafter referred to as the "Anti-Monopoly Law"), the "Guidelines on the Definition of Relevant Market by the State Council Anti-Monopoly Committee" (hereinafter referred to as the "Guidelines"), and the "Guidelines for the Review of Horizontal Operator Concentration" (hereinafter referred to as the "Guidelines").
(2) Classification of Relevant Market in China
China formulated the "Anti-Monopoly Law" in 2008, which clearly defines the concept of relevant market, categorizing it into relevant product markets and relevant geographic markets. In addition, under specific circumstances, relevant time markets and relevant technology markets also need to be considered.
1. Relevant Product Market
The relevant product market refers to the effective scope of competition for the goods or services operated by the parties within a certain period. Defining the relevant product market requires starting from the competitive pressure faced by enterprises, which mainly comes from demand substitution (considering the substitutability of products or services from the consumer's perspective) and supply substitution (considering the substitutability of products or services from the supply side).
2. Relevant Geographic Market
The relevant geographic market refers to the geographical scope of competition for the goods or services operated by the parties within a certain period. Defining the relevant geographic market requires considering factors such as the sales range of products or services, consumer preferences, and transportation costs.
(3) Characteristics of Relevant Market Definition in China
China emphasizes considering the actual situation and competitive conditions of the domestic market in defining the relevant market; enforcement agencies will comprehensively consider various factors, including market share, competitive conditions, and market entry barriers.
II. Definition of Relevant Market in U.S. Antitrust Law
(1) Legal Basis for Defining Relevant Market in the U.S.
In the United States, the definition of the relevant market is mainly based on antitrust laws such as the "Sherman Act" and the "Clayton Act", as well as guidelines and case law published by the Department of Justice and the Federal Trade Commission. Among them, the "Sherman Act" is the earliest and most fundamental antitrust law in the United States, laying the foundation for U.S. antitrust law.
(2) Classification of Relevant Market in the U.S.
The definition of relevant market in U.S. antitrust law has mainly developed through case law, primarily involving relevant product markets and relevant geographic markets, and considering time markets under specific circumstances.
1. Relevant Product Market
The definition of relevant product market in the U.S. is mainly based on the principle of demand substitution, which considers which products or services can be substituted for each other in the eyes of consumers.
2. Relevant Geographic Market
The definition of relevant geographic market in the U.S. is mainly based on geographical sales areas and factors such as transportation costs. However, with the development of e-commerce and the internet, the definition of geographical markets has become more complex.
3. Two-Sided Market Theory
In the U.S., the method of defining relevant markets under the two-sided market theory mainly focuses on analyzing the pricing structure, demand elasticity, and indirect network externalities for users on both sides of the platform. By considering these factors, enforcement agencies can more accurately define the boundaries of two-sided markets and assess the impact of mergers or monopolistic behavior on market competition.
(3) Characteristics of Relevant Market Definition in the U.S.
The U.S. emphasizes the use of economic methods and analytical tools in defining relevant markets, such as the hypothetical monopolist test. Enforcement agencies will consider the dynamics and competitiveness of the market, as well as the entry capabilities of potential competitors.
III. Definition of Relevant Market in European Antitrust Law
(1) Legal Basis for Defining Relevant Market in Europe
The laws on which European antitrust law is based mainly include the "Treaty on the Functioning of the European Union" (formerly the "Treaty Establishing the European Community"), regulations, directives, and decisions formulated by the Council of the European Communities and the European Commission (such as the Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings, and the European Commission's Notice on the Definition of Relevant Market), as well as judgments and preliminary rulings from the European Court.
(2) Classification of Relevant Market in the EU
The definition of relevant market in European antitrust law is similar to that in the U.S., also primarily considering relevant product markets and relevant geographic markets, but with differences in specific methods and standards.
1. Relevant Product Market
The definition of relevant product market in Europe is also based on the principle of demand substitution. However, the European Court has paid more attention to factors such as therapeutic equivalence and cross-elasticity of demand in its case law.
2. Relevant Geographic Market
The definition of relevant geographic market in Europe is mainly based on geographical sales areas, consumer preferences, and transportation costs. However, similar to the U.S., with the development of the internet and e-commerce, the definition of geographical markets has also become more complex.
3. Reverse Payment Behavior
In Europe, reverse payment behavior is also regulated by antitrust laws. Reverse payment behavior refers to the situation in the field of patent protection where brand-name drug manufacturers (patent holders) promise to provide potential generic drug competitors (non-patent holders) with compensation (in monetary or non-monetary form) to abandon challenges to the validity of the relevant patent or delay entry into the relevant market for the patented drug. Reverse payment behavior may have exclusionary and anti-competitive effects, constituting a monopolistic agreement regulated by antitrust laws.
(3) Characteristics of Relevant Market Definition in the EU
The EU also emphasizes the use of economic methods and analytical tools in defining relevant markets, but unlike the U.S., the EU places greater emphasis on the integrative and comprehensive characteristics of the market. Enforcement agencies will comprehensively consider the geographical scope of the market, product characteristics, consumer demand, and the interconnections between different markets. In addition, the EU also focuses on assessing the entry barriers and market dynamics for potential competitors to ensure that the defined relevant market is neither too broad nor too narrow, accurately reflecting the true state of market competition.
IV. Conclusion
From the above analysis, it can be seen that there are the following differences in the "definition of relevant market" from the perspective of antitrust in China, the United States, and Europe: 1. Legal systems: The different legal systems relied upon by each country lead to differences in the legal basis and enforcement standards for defining relevant markets; 2. Guiding principles: The guiding principles followed by each country when defining relevant markets vary, such as China focusing on the actual situation and competitive conditions of the domestic market, the United States emphasizing the use of economic methods and analytical tools, and Europe tending to conduct a comprehensive assessment based on the degree of market integration and the range of consumer choices; 3. Specific methods: China uses a combination of the hypothetical monopolist test, demand substitution, and supply substitution analysis when defining relevant markets, paying attention to both national conditions and internationally accepted practices; the United States tends to use the hypothetical monopolist test (SSNIP) and demand substitution analysis to assess market competition; Europe emphasizes the dominant position of demand substitution analysis while also considering supply substitution factors and the application of the hypothetical monopolist test to ensure a comprehensive market definition.
In the context of globalization, Chinese enterprises engaging in cross-border business need to pay attention to the differences in antitrust regulations between China, the United States, and Europe, respond flexibly to market definitions, and deeply understand the target principles. They may seek assistance from lawyers to ensure that the enterprise proceeds in a stable and compliant manner.
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