Fair Trade Law Q&A - Market Definition and Market Share Calculation

What constitutes a relevant market, and what factors are generally considered in defining the relevant market?

Under Article 5 of the Fair Trade Act, the term "relevant market" as used in this Act means a geographic area or a coverage wherein enterprises compete in respect of particular goods or services. Accordingly, the term "market" under the Fair Trade Act does not merely refer to a collection of products or services sharing similar characteristics. Rather, it refers to the boundaries within which enterprises impose competitive constraints upon one another in relation to the products or services they offered.

The competitive constraints affecting enterprises may arise from demand substitution or supply substitution. Therefore, in defining a relevant market, both factors are generally considered. However, demand substitution constitutes the primary consideration, while supply substitution may also be taken into account depending on the characteristics of the goods or services at issue.