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CHAPTER VI
RELEVANT MARKET
A. Introduction
In 2024, defining a relevant market, or “the area of effective
competiton,”1 continues to be a necessary first step for courts analyzing
antitrust claims. A court’s assessment of the qualitative and quantitative
arguments about the relevant market is frequently outcome-determinative.
B. Product Market Definition
1. Basic Principles
Courts determine the outer bounds of a relevant product market by
considering “the reasonable interchangeability of use or the cross-
elasticity of demand between the product itself and substitutes for it.”2
Courts and agencies in 2024 continue to analyze qualitative evidence
about the relevant product market using the “practical indicia” framework
outlined by the Supreme Court in Brown Shoe v. United States3 and
quantitative evidence using methods in the 2023 Merger Guidelines, 4 such
as the “hypothethical monopolist test.” Additionally, courts and agencies
adhered to the 2023 Merger Guidelines’ acknowledgement that “direct
evidence of substantial competition” and “direct evidence of the exercise
of market power” can demonstrate that consumers consider products to be
reasonable substitutes.5
Since numerous narrower relevant markets may exist within one broad
product market, courts often conduct a “line drawing exercise” that
1. United States v. Google LLC, 2024 U.S. Dist. LEXIS 138798, at *229
(D.D.C. Aug. 5, 2024) (quoting Brown Shoe Co. v. United States, 370 U.S.
324 (1962)).
Cir. 2024) (quoting Brown Shoe Co. v. United States, 370 U.S. 294 (1962)).
3. 370 U.S. 325 (1962).
4. U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, MERGER
GUIDELINES (2023) [hereinafter 2023 MERGER GUIDELINES],
available at
https://www.ftc.gov/system/files/ftc_gov/pdf/2023_merger_guidelines_fi
nal_12.18.2023.pdf.
5. See 2023 MERGER GUIDELINES § 4.3.
104 Relevant Market
considers the product’s price, functionality, and qualities to account for all
reasonably interchangeable products.6 Courts can also conclude that two
products are reasonably interchangeable if there is a high cross-elasticity
of demand between two products, whereby customers respond to a price
increase in one product by switching to the other.7
a. Reasonable Interchangeability of Use
In United States v. Google LLC, the district court held that goods are
functionally interchangeable so long as consumers can substitute the use
of one for the other, even if the products compromising the relevant market
are not entirely the same.8 In that case, the DOJ alleged that Google
illegally maintained a monopoly in search engine services and in the
search text advertising market through exclusivity agreements that
foreclosed Google’s rivals. The DOJ defined the two relevant product
markets as general search services (GSE) and general search text
advertising. Google argued that consumers used GSEs interchangeably
with social media platforms and specialized vertical provider (SVP)
platforms, such as Expedia and Yelp. Applying the Brown Shoe factors,
the district court held that GSEs constituted a relevant product market and
that “no user could confuse a GSE with an SVP or a social media site.” 9
In FTC v. Tapestry, the FTC sought to block the merger of two large
fashion accessory brands. The FTC alleged that within the broader market
for handbags in which the two companies competed, distinct handbag
submarkets existed for “mass market,” “accessible luxury,” and “true
luxury.”10 The court found that the importance of brand name and
reputation in the handbag market supported a distinct market for accessible
luxury handbags and stated that “ignore[ing] the peculiar role of brands in
the handbag market would be to ignore the commercial realities of the
industry.”11 Furthermore, the court rejected the defendants’ argument
about consumers’ cross-shopping habits, stating that “just because
someone owns a Louis Vuitton bag, a Coach bag, and a Zara bag does not
6. See id.
7. Regeneron Pharms., Inc. v. Novartis Pharma AG, 96 F.4th 327, 339 (2d
Cir. 2024).
8. 2024 U.S. Dist. LEXIS 138798, at *230 (D.D.C. Aug. 5, 2024).
9. Id. at *234.
10. FTC v. Tapestry Inc., 2024 U.S. Dist. LEXIS 194671, at *29 (S.D.N.Y.
Oct. 24, 2024).
11. Id. at *35.
