We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Procedures

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is a Relevant Market?

By Christine Hudson
Updated: May 16, 2024

A relevant market is determined by a company’s direct competition. If one company has a certain type of product and another has the exact same product or one which is extremely similar, then it would be considered the relevant market. Basically, any two companies which can be considered “competitors” can also be considered relevant markets. When two or more companies are considered to be in the same relevant market, certain laws will govern their competitive behavior. These laws are usually specific to the area in which they do business.

Assessing substitute goods and analyzing opposing playing fields is precisely a relevant arena. Whether or not a market is relevant boils down to geography and products. Ranked on price range, primary functions, and target markets, a product deemed relevant is one that may be seen as a worthy rival to another similar or leading item. Relevant markets are determined by legal assessors as well as by every company as they "scope" the competition.

Direct competition is one of the largest factors considered, but direct competitors are not always the only companies included in the assessment. When the items of companies are virtually interchangeable, this market is considered relevant. It is where the demand contest occurs and companies can then compare earnings, techniques and demographics to determine their standing within it. All market-entering and market-available products that carry close price points within the same time span are factors in a relevant market.

In legal circles, the goal of a relevant market is to help companies establish effective rules of competition. Rules related to the abuse of a dominant position, restrictive practices, and merger policies are developed within this context. The key is that companies involved in competitive arenas must work within the constraints of two confines. First, demand substitution presupposes that buyers can choose among a variety of products with similar characteristics. Then, it assumes that suppliers do not encounter hindrances to providing said products or services to a certain market.

Access conditions are examined, patterns are measured and statistics are analyzed to determine demand elasticity. In the European Union (EU), a regulatory commission may go so far as to perform spontaneous inspections in order to evaluate real conditions and gauge compliance. In the process of market share calculation, typically unveiled based on sales numbers, capacity can also be exposed. A relevant market is the playing field, and consumers are the players.

MyLawQuestions is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
Share
MyLawQuestions, in your inbox

Our latest articles, guides, and more, delivered daily.

MyLawQuestions, in your inbox

Our latest articles, guides, and more, delivered daily.