17 What is a market?

As you saw in the answers to the previous activity, the CMA decided to impede the merger, stating that the two retailers were too close to continue with their plans. JD Sports was not content with the decision, as they stated that their merger went beyond physical stores. It would mean a merger of online stores, which now is a most pressing issue, allowing them to compete with giants like Nike and Adidas, whose online stores have become a bigger competitor.

The case highlights an important issue competition authorities face when analysing competition cases. Markets are not as easily defined given the relationships they have. Sometimes, the consumer can decide to use other products; for example, they might be facing the decision to buy trainers or sandals as they see them related. 

This video from the OECD can help you grasp the difficulties of defining a market. 

Consider what you think of the decision and whether the CMA overlooked online store limitations, as well as your perspective on the decision of the CMA for JD Sports and Footasylum. Consider how they defined the market and whether their decision not to count online stores as part of the market definition was appropriate.

Be aware that there is no right answer. Although the court reached a decision, it failed to consider the potential for online sales.