Relevant market

                                         Relevant market

INTRODUCTION 

Competition law is a body of law and regulation designed to avoid imbalance in markets caused by anti-competitive commercial practices. The primary object of competition law is to provide a healthy environment for both buyers and seller. Relevant market is the part of the competition act where buyer and seller exchange and distribute their product and services in defined areas.                                                  

                         

   COMPETITION LAW IN INDIA

                                RELEVANT MARKET SECTION-2(r)

      RELVANT GEOGRAPHIC MARKET                                        RELEVANT PRODUCT MARKET

                  Section-2 (s)                                                                                Section-2(t)

• Relevant market defines under section 2( r) of the competition act,2002. It is a combination of relevant product market.
• “Relevant market” means 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 the markets.
• “Relevant geographic market” means a market comprising the area in which the conditions of competition for supply of goods or provision of services or demand of goods or services are distinctly homogenous and can be distinguished from the conditions prevailing in the neighbouring areas.

Condition for goods and services is:-

1. Homogeneous.
2. Distinguishable for condition prevailing in geographic area.

• “Relevant product market” means a market comprising of all those products or services.

Product and services which are:-

1. Interchangeable.
2. Substitutable by consumer by the reason  of –

1. Characteristic of product or service.
2. Price of product or service.
3. Intended use of product or service.

Factors for determining the relevant geographic market are given under section 19(6) of the act.

The Commission shall, while determining the “Relevant geographic market”, have due regard to all or any of the following factors, namely:-

1. Regulatory trade barriers.

E.g. You cannot open liquor shop in Gujrat and Bihar.

2. Local specification requirements.

E.g. fishing net in North India is irrelevant.

3. National procurement policies.

E.g. India China situation.

4. Adequate distribution facilities.
5. Transport costs.

E.g. Whether we are able to pay or not.

6. Language.

E.g. Language is a very big role in service, language of service provider and of customer will define relevant geographic market.

7. Consumer preferences.

E.g. Veg burger in USA will not be successful.

8. Need for secure or regular supplies or rapid after sales services.

E.g. If there is not service centre particular company then people will not buy those company product. 

FACTORS TO DETERMINE RELEVANT PRODUCT MARKET:

It is given under section-19(7) The Commission shall, while determining the “relevant product market”, have due regard to all or any of the following factors, namely:-

(a)Physical characteristics or end-use of goods.

different type of table will be used by different class of people so each table will be constituting a different relevant product market.

(b) Price of goods or service.

e.g.: RS. 5 or 1k pen, their relevant product market will be different because target audience distinguishable

(c) Consumer preferences.

e.g.: for a university student pen will be preferred over a pencil, so relevant product market will be depended on the preference of the consumer.

(d) Exclusion of in-house production;

e.g.: Pencil company will produce some graphite which is not use in pencil, so we will exclude that even though this graphite is sold apart too. Scrap is sold too but that will be excluded.

(e) Existence of specialised producers;

e.g.: if there is a product that only 2 can make, then we are relevant product market by ourselves, if the product is specialised producer. 

(f) classification of industrial products.

e.g.: Pesticide Plant never sale the end product only but they sale by products as well.

         Singular company sale different product but their end product is really specific.

         Car company produce full car as well as spare part there are different market.

CONCLUSION: 

After above discussion now , I conclude my topic relevant market is the combination of relevant product market and relevant geographic market. Relevant market plays a vital role in the competition law they provide a frame work for accessing market power , analysing competitive ?.effect and ensuring fair competition.in this assignment analysing the relevant market on the basis of case law. for the determine anti- competitive behaviour and the abuse of dominant position there is need to defined relevant market because without relevant market we cannot analyse or prove the anti-competitive practices and abuse of dominant position. So relevant market is the very important part of the competition law.

Author: Vandana kumari, a Student of Gautam Buddha University Greater Noida