Competition authorities traditionally define relevant markets based on observed substitution patterns. However, digital cases often involve complementary products or services (e.g., productivity suites, design software, devices and app stores, and more recently AI features embedded in platforms and products).
Certain products exhibit such strong complementarities that they should not be evaluated separately. For example, consider a pair of shoes or the various components that make up a car—these items are so intrinsically linked that their value is best understood together.
The article, “‘Suite Dreams’: Market Definition and Complementarity in the Digital Age,” published in the Competition Policy International (CPI) Antitrust Chronicle and written by CRA’s Matteo Foschi and Romain Bizet, identifies under what conditions software suites or digital ecosystems display sufficient complementarities to be part of a single relevant market.
Complementarities have significant implications for evaluating conduct or mergers in digital markets, such as distinguishing between the introduction of new product features and the expansion into new markets. Traditional theories of harm often require agencies to identify a narrow market for a suite functionality, a secondary product, or a bundle component to be the subject of an anticompetitive or merger-specific effect.
The authors review recent European and UK experiences and identify frameworks and market characteristics frequently used by competition authorities when faced with complement products.
Read more about market definition and complementarity in the digital age here.
