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EUROPEAN COMMISSION DG Competition - page 8 / 113

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3. MARKET DEFINITION IN ARTICLE 82 CASES

Market Definition 11. The concept of dominance contained in Article 82 of the Treaty relates to a position of economic strength on a market. In the application of Article 82 it is therefore necessary to define a relevant market. The relevant market provides a framework for analysing whether the undertaking concerned holds a dominant position and, therefore, whether its conduct may be abusive within the meaning of Article 82.10

Main purpose of market definition 12. The main purpose of market definition is to identify in a systematic way the immediate competitive constraints faced by an undertaking. The objective of defining a market in both its product and geographic dimension is to identify all actual competitors of the undertaking concerned that are capable of constraining its behaviour. Guidance on this issue can be found in the Commission Notice on the definition of the relevant market for the purposes of Community competition law.11 That Notice will not be further explained in this paper and should serve as the basis for market definition issues also for the application of Article 82.

Cellophane Fallacy 13. This paper does, however, provide additional guidance with respect to one specific market definition issue that may arise in the context of Article 82 cases12: the price charged by the allegedly dominant undertaking – if it is indeed dominant – will almost inevitably have been raised above the competitive level. Unless appropriately accounted for, this can lead to markets

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Schiffahrts- und Speditionsgesellschaft mbH [1994] ECR I-2509, paragraph 14; Case C-96/94 Centro Servizi Spediporto Srl v Spedizioni Marittima del Golfo Srl [1995] ECR I-2883, paragraph 20; Case C-35/99 Arduino [2002] ECR I-1529, paragraph 34; and Case C- 198/01Consorzio Industrie Fiammiferi (CIF) v Autorità Garante della Concorrenza e del Mercato [2003] ECR I-8055, paragraph 45. See Case T-62/98 Volkswagen AG v Commission [2000] ECR II-2707, paragraph 230. OJ C 372, 09.12.1997, p. 5.

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Aftermarket cases Issues relating to market definition in aftermarket cases are discussed in section 10.

Elasticity of demand

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