Chapter VI Relevant Market

• Pages: 109-130

CHAPTER VI

RELEVANT MARKET

Defining the relevant product and geographic markets remains a

critical, and often outcome-determinative, issue in antitrust cases.1 In

2022, courts and government agencies continued to address various issues

regarding both product and geographic markets.

Basic Principles

Courts continue to evaluate product market definitions by applying the

“practical inidicia” framework, set forth in Brown Shoe Co. v. United

States,2 to ensure that proposed relevant market definitions account for all

products that are reasonably interchangeable in use. Courts also consider

economic analyses, such as the “hypothetical monopolist” test described

in the 2010 Horizontal Merger Guidelines and earlier versions,3 to

evaluate the appropriateness of a proposed relevant market definition. As

1. A relevant market has two components: (1) the relevant product market

and (2) the relevant geographic market. The product market identifies the

products or services that compete with each other, while the geographic

market identifies the area within which the relevant product competition

occurs. See, e.g., United States v. Marine Bancorp., 418 U.S. 602, 618

(1974).

2. 370 U.S. 294 (1962).

3. See U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, HORIZONTAL MERGER

GUIDELINES § 4.1.1 (2010), reprinted in Trade Reg. Rep. (CCH) ¶ 13,100;

U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, HORIZONTAL MERGER

GUIDELINES § 1.0 (1997), reprinted in Trade Reg. Rep. (CCH) ¶ 13,104;

U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, HORIZO NTAL MERGER

GUIDELINES § 1.0 (1992), reprinted in Trade Reg. Rep. (CCH) ¶ 13,104;

U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, HORIZONTAL MERGER

GUIDELINES § 2.11 (1984), reprinted in Trade Reg. Rep. (CCH) ¶ 13,103;

U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, HORIZO NTAL MERGER

GUIDELINES § II(A) (1982), reprinted in Trade Reg. Rep. (CCH) ¶ 13,102.

110 2022 Annual Review of Antitrust Law Development

the First Circuit reaffirmed in Vázquez-Ramos v. Triple-S Salud, Inc.,4 a

complaint must allege facts that plausibly delineate a relevant market, but

plaintiffs need not “provide precise figures and calculations at the pleadin g

stage.”5

In PLS.com, LLC v. National Association of Realtors,6 the Ninth

Circuit held that market definition was not required for per se claims or

rule of reason claims brought under Section 1 of the Sherman Act where

there is evidence of actual anticompetitive impact, but that antitrust

plaintiffs must define a relevant market for rule of reason claims based on

indirect evidence.7 The court determined that plaintiffs plausibly alleged a

per se violation of the Sherman Act by pleading that defendants engaged

in a group boycott and therefore did not have to define the relevant

market.8 The Ninth Circuit held that the Supreme Court’s decision in Ohio

v. American Express Co.9 regarding two-sided markets could apply at the

pleading stage, contrary to plaintiff’s argument.10 The court reasoned that

with respect to two-sided platforms, which offer different products to

different groups who depend on the platform, plaintiffs would sometimes

be required to define the relevant market to include both sides of the

platform, depending on the characteristics of the relevant products.11 The

court explained that the requirement might be triggered by the presence of

simultaneous transactions or strong indirect network effects, where the

value of the platform for one group of participants depends on how many

members of another group participate.12 The court declined to decide the

precise characteristics that trigger the requirement because it found

plaintiff adequately pled anticompetitive impact on the market as a whole,

including with reference to both sides of the proposed relevant market.13

In United States v. Teva Pharmaceuticals USA, Inc.,14 however, the

Eastern District of Pennsylvania held that even per se cases “require some

definition of a relevant market,” though the burden is diminished in per se

4. 55 F.4th 286 (1st Cir. 2022).

5. Id. at 298.

6. 32 F.4th 824 (9th Cir. 2022).

7. Id. at 838.

8. Id. at 837.

9. 138 S.Ct. 2274 (2018).

10. See PLS.com, 32 F.4th at 838.

11. Id. at 838-39.

12. Id. at 839.

13. Id. at 839-40.

14. 2022 U.S. Dist. LEXIS 187130 (E.D. Pa. 2022).