According to Commission Notice No 97/C 372/03 on the definition of the relevant market, “[a] relevant product market comprises all products and/or services which are regarded  as interchangeable or substitutable by the consumer, by reason of the products’ characteristics, prices and their intended use”. The characteristics of the products in question, by virtue of which those products are particularly apt to satisfy an inelastic need and are only to a limited extent interchangeable with other products, are of essential significance in the definition of the relevant market, which may, however, be modified with regard to other factors.

– Nature of product or  service: A product or a service is defined by its objective features, its properties, price, production conditions or standards and its image. Those characteristics are not assessed by themselves but in relation to the actual behavior of consumers. Products that meet different needs belong to distinct markets.

The degree of interchangeability for products with identical uses is measured with regard to the objective features of the products in question. The format, reproduction quality, ease of handling and the range of accessories, the level of cover offered, the length, type of body and power, especially engine power, speed, robustness and sorting, or stocking and delivery capabilities and ancillary services constitute objective qualities that make it possible to define the relevant market.Technical characteristics are not always sufficient to conclude that two products belong to the same market. When there is a sufficiently strong link between the products for them to be considered complementary, they can belong to the same market despite their differences even though the competition authorities generally tend to distinguish as many markets as there are products, even when the products are intended to meet the same needs (see: Complementary products or services).

Price is one of a product’s essential features. The difference in price makes it possible to distinguish the national roaming mobile market from the international roaming mobile market.

The production technique used may also be a factor for identifying the market. Such is the case with the market for ice cream where individual ice creams, which are finished products that require technology and know-how, are distinguished from ice cream in tubs, which are semi-finished products that do not acquire their own characteristics until they are divided into portions. Similarly, the market for the collection and sorting of used sales packaging for private consumers differs from that for the collection of industrial and commercial waste, where collection depends on different logistical requirements and because the recoverable packaging is not the same. However, different production techniques can only suffice to distinguish two relevant markets if they are crucial to the consumer.

A product’s brand image or its reputation also makes it possible in certain cases to identify a separate market. A manufacturer’s investment in terms of advertising and quality of distribution may give its products an aura of exclusivity and prestige that makes them different from comparable products. Thus, luxury cosmetic products, broadcasting rights for football matches or medium format single lens reflex cameras constitute specific markets due to their image and reputation.

Finally, the existence of regulatory barriers to entry to the market of a product or a service is a criterion used for defining the market concerned. This is true for the railway services market, which characterizes a distinct sub-market within railway transport due to its specific regulatory framework, or for the wholesale market for national roaming access for communication services, for which a license is required.

– Conditions of use: Products serving the same purpose that are intended for the same customers and are distributed in the same packaging normally belong to the same market. However, similar products may form separate markets if their intended uses vary. The mode of consumption of ice cream – either at the purchase site or at the buyer’s home – or beer – either sold retail or consumed in a drinking establishment – constitutes an essential criterion used to define the market. This is also the case in the field of transport, according to whether travel is being undertaken for professional or personal reasons, or in the field of pharmaceuticals, according to the therapeutic uses of drugs. Therefore, the relevant market of a medicinal product may, in addition to the medicinal products authorized for the treatment of the diseases concerned, include another medicinal product whose marketing authorization does not cover that treatment but which is used for that purpose and is thus actually substitutable with the former. Finally, in relation to freight forwarding services, the preference of customers for a package of services rather than individual services due to the savings able to be made in terms of time and money of the former, make it possible to define a relevant market relating to freight forwarding service based on a package of services.

– Marketing conditions: The specificity of the marketing method can create a lack of substitutability of the product in the eyes of users. The definition of the market must therefore take into account the methods of distribution: presentation of the product, quantities distributed, channels and techniques used. Thus the market for the distribution of beer in public houses is a separate market from the retail trade market because of the additional service provided for on-the-spot consumption. The same is true for individually wrapped ice cream, Italian-style soft ice cream and ice cream served in restaurants, which require different facilities, personnel and space. Generally, the existence of different distribution channels alone is not sufficient to distinguish two product or service markets.