Defining the geographic scope of a market that may have national or broader borders can be a challenging process for competition agencies, especially in merger reviews and abuse of dominance cases.
More generally, the topic became relevant in light of several long-term market trends, including globalisation, trade liberalisation and digitalisation. In addition, improvements in international shipping and door-to-door delivery networks for consumers are increasing the reach of suppliers at the retail and wholesale levels. These trends increase the complexity of geographic market definition.
The OECD held a roundtable in November 2016 to identify challenges faced by agencies to delineate markets that may have national or broader borders, and discussed how those challenges are being overcome. The discussion also touched on current approaches in terms of evidence and analysis (e.g. pricing patterns and import data) as well as some areas of controversy, such as supply substitution.
