Catchment areas in merger control

Law & Economics Workshop organized by Concurrences Review in partnership with Mayer Brown and Oxera.

The decision-making practice of the Competition Authority: between a flexible approach and taking account of new issues

Simon Genevaz

Sales in lines are "deterritorialized", they are neither national nor local, they are simply available everywhere. It is therefore not impossible that our catchment areas keep a few good days ahead of them.

The relationship between catchment area and relevant market is not obvious. In theory, and according to the Merger Control Guidelines, a relevant market can be defined on the basis of the hypothetical monopoly reasoning, according to which the absence of demand deferral in the event of a significant and non-transitory price increase makes it possible to define such a market. In practice, this type of analysis requires the implementation of the SSNIP test in order to define a relevant market.

However, in merger cases concerning the distribution sector, the concept of catchment area is commonly used. The concept of ’catchment area’, which identifies the usual area of origin of the bulk of an outlet’s customers, is primarily commercial and has no legal existence. It is nevertheless very useful for assessing the impact of this type of operation. Several methods can be used to delimit catchment areas.

Photos © Léo-Paul Ridet.

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