The determination of Relevant Geographic Market is more important than the determination of Relevant Product Market when a complainant has approached the Commission alleging the existence of an anti-competitive agreement – Comment

 Here is a 600-word point-wise answer to the statement:

“The determination of Relevant Geographic Market is more important than the determination of Relevant Product Market when a complainant has approached the Commission alleging the existence of an anti-competitive agreement” – Comment

🧾 Introduction

In competition law under the Competition Act, 2002, determining the relevant market is crucial before evaluating whether an anti-competitive agreement exists. The relevant market includes two components:

Relevant Product Market (RPM)

Relevant Geographic Market (RGM)

The statement implies that RGM may hold greater significance than RPM in such cases. Let’s analyze this.

📌 1. Definition of Relevant Geographic Market (RGM)

As per Section 2(s) of the Competition Act, 2002:

"Relevant geographic market means a market comprising the area in which the conditions of competition for the supply of goods or services are distinctly homogeneous."

This includes factors like:

Regulatory barriers

Local consumer preferences

Distribution channels

Transport cost and logistics

Language and customs

📌 2. Definition of Relevant Product Market (RPM)

As per Section 2(t):

"Relevant product market comprises all products or services regarded as interchangeable or substitutable by the consumer due to characteristics, price, and intended use."

This includes:

Functional interchangeability

Cross elasticity of demand

Consumer perception

📌 3. Importance of RPM in Anti-Competitive Agreements

Helps assess what product/services are impacted.

Necessary to define the boundaries of the competition being harmed.

RPM often indicates whether goods/services are close substitutes.

🟡 Example: In the cement cartel case, the CCI assessed RPM (various cement brands) to conclude cartelization.

📌 4. Importance of RGM in Anti-Competitive Agreements

Determines where the competition is being distorted.

A cartel in Delhi might not affect consumers in Kerala.

Helps analyze regional dominance and impact.

🟢 Example: In the DLF case (real estate), the RGM was limited to Gurgaon, not the whole of India.

📌 5. When RGM Becomes More Important Than RPM

✅ Regional cartels: If firms fix prices or limit supply only in one region.

✅ Market foreclosure: When agreements bar new players in one geographic area.

✅ Territorial distribution agreements: When companies divide markets on geographic lines (e.g., East India vs West India).

✅ Abuse of dominance in regional markets: Even if a product is generic (like salt or steel), regional monopolies can exist.

📌 6. Practical Implication in Enforcement by CCI

Without proper RGM identification, the scope of investigation may be too broad or narrow.

May lead to incorrect conclusions about dominance, AAEC (Appreciable Adverse Effect on Competition), or the presence of collusion.

For example, retailers forming a price-fixing alliance in South India needs RGM narrowing before judging its impact.

📌 7. Statutory Framework and CCI Approach

The Market Definition Guidelines (2022) by CCI recommend simultaneous assessment of both RPM and RGM.

However, case-specific weight is given depending on:

Type of conduct

Market structure

Availability of substitutes

Geographic spread of the business

📌 8. Judicial View

Indian courts and the CCI in many decisions have emphasized context-based determination.

🧑‍⚖️ Example:

In Fx Enterprise Solutions v. Hyundai Motors, the CCI held that without defining relevant market properly (including RGM), no anti-competitive behavior can be concluded.

✅ Conclusion

✔ While both RPM and RGM are essential, in cases involving region-specific practices, the Relevant Geographic Market becomes more important than RPM.

✔ The real impact of competition distortion cannot be assessed unless "where" it happened is clearly demarcated.

✔ Hence, depending on facts, RGM may outweigh RPM in significance during CCI’s assessment of anti-competitive agreements.