Legal Definitions - Market Definition

Market definition is a term used in antitrust law to determine the economic sphere in which anti-competitive conduct is measured. It helps to identify the boundaries of a market and the competition within it.

For example, in the case of FTC v. Whole Foods Mkt., the court had to determine the market definition for premium organic foods. The court found that there were two types of consumers: marginal consumers and core consumers. Marginal consumers are those who are not strongly committed to premium organics and will switch to conventional produce if the price increases. Core consumers, on the other hand, are strictly committed to organic foods and will continue to shop at Whole Foods even if the price increases.

The court held that core consumers should be included in the market definition analysis because they are an important part of the competition within the market. If Whole Foods were to merge with another premium organic food store, it could potentially harm competition for core consumers, who have limited options for purchasing premium organic foods.

Overall, market definition is an important tool for antitrust law to ensure that competition is protected and consumers have access to a variety of choices within a market.