Turkey: Market Definition (Relevant Market - Relevant Geographic Market – Natural Market)

Last Updated: 13 May 2019

The Turkish Competition Board (“Board”) has issued a number of guidelines to supplement and provide guidance on the enforcement of Turkish competition law rules. In particular, Relevant Market Definition Guidelines (“Guidelines”), issued in 2008, are closely modelled after the European Commission Notice on the Definition of Relevant Market for the Purposes of Community Competition Law (97/C 372/03).

The economic concept of “market” used in competition law analysis represents a technical antitrust term. It is different from the concept used in a trade sector as a commercial term. Indeed, the Guidelines take this difference into account and use the term “relevant market” to delineate the market concept used for competition law purposes.

Relevant Market

The concept of relevant market is important for the purposes of dominant position and concentration analyses, because an extensive or restrictive approach concerning the relevant market would have direct effects on the finding of a dominant position. Dominance can basically be defined as the power of one or more undertakings in a particular market to determine economic parameters (such as price, supply, the amount of production and distribution) single-handedly, i.e. independently of their competitors and customers. To assess whether a company is in a dominant position, the market in which the investigated/reviewed act/transaction should therefore be defined beforehand. This is because the market(s) in which the relevant activity takes place and their inter-connections are indicative of the degree of effect on competition.

Defining the relevant market usually requires large-scale and detailed economic analyses. This usually proves to be a challenge for the competition authorities, given the huge variety of markets and economic activities. Therefore, it is usually not possible to reach a definite conclusion easily.

Competition authorities usually apply a two-fold analysis to define the relevant market: (i) defining the relevant product (or services) market, and (ii) defining the geographical market. While the analysis covers the time element as well, this dimension of the relevant market is fused into the more fundamental two-dimension analysis.

  1. Relevant Product Market

A relevant product market covers all of the products and/or services which are deemed as interchangeable or substitutable by the consumer, for the products' characteristics, their prices and their area of use. The definition takes us to the concept of “demand substitution”, which represents the most immediate and effective disciplinary force on the suppliers of a given product/service. The Board’s decisional practice and Guidelines also indicate “supply substitution” as another main criterion for the relevant product market definition exercise. A detailed analysis of the demand and/or supply conditions is usually required for a correct market definition.

  1. Demand Substitution

“Demand-side substitutability” or “demand substitution” is the most important and widely-used concept in defining the relevant market, both at the Turkish and European levels. That is because the fastest and most straightforward reaction to a price increase would come from the demand side. That reaction may take the form of stopping the purchase of the good/service and purchasing substitutable products/services instead. The competition authorities usually apply the SSNIP test - “small but significant and non-transitory price increase” - to analyze the substitutability of similar products/services to the products/services in question.

  1. Supply Substitution

Supply substitutability may also be taken into account, to the extent its effects are equivalent to those of demand substitution. Supply substitutability focuses on the question of whether suppliers can switch production to the substitutable products in the short term without incurring significant costs or risks.

The concept of supply substitution can be an important factor in defining the relevant market, but past experiences suggest that competition authorities are usually inclined to concentrate more on demand-based analyses. Supply substitutability may, as mentioned in the Guidelines, be taken into account in those cases where its effects are equivalent or at least comparable to those of demand substitution in terms of effectiveness and immediacy.

  1. Relevant Geographic Market

The definition of geographic market takes account of the relevant company’s location and the nature of the relevant product. The most important element in the definition of a geographic market is the homogeneity of competition parameters across different geographical areas.

The Guidelines summarize the main principles used in the geographic market definition exercise. These are as follows:

  • Past evidence of diversion of orders to other areas;
  • Quantitative tests that are particularly developed for defining the market;
  • Basic demand characteristics, for instance national preferences, preferences for national brands, the need for a local presence etc.;
  • Views of customers and competitors;
  • Current geographic purchase patterns;
  • Trade flows/pattern of shipments. This information may be used alternatively, provided that the trade statistics are available with a sufficient degree of detail for the relevant products. Trade flows and, especially, the rationale behind them may provide useful insight into the analysis;
  • Barriers and switching costs associated with diverting orders to companies located in other areas, for instance transport costs, restrictions arising from the nature of the relevant products, access to distribution in a given area, regulatory barriers still existing in certain sectors etc.

  1. Natural Market

Occasionally, the concept of “natural market” comes into play in defining the geographic market. “Natural market” refers to cases where certain factors dictate the limits of a geographic market. The following two examples can be used to illustrate the concept of natural market:

  1. Electricity retailers can only sell electricity to customers in the cities where they hold rights/concessions to do so. Their natural market is limited to the cities where they can legally operate.
  2. Cement or ready mixed concrete producers can operate effectively only within their own hinterlands; i.e. 250-300 km of distance of their location. Therefore, they cannot provide their products to areas outside of this distance-range.

In both cases, the geographic market cannot be determined differently from the natural market.

This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Contact the Author?
Click here to email the Author
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Other Turkey Advice Centres
Intellectual Property
Privacy & Data Protection
More Advice Centers
Significant Recent Cases
Turkish Competition Board case summaries.
Useful Resources
The most recent developments within our firm and practice areas.
ELIG Gürkaynak quarterly newsletter, Legal Insights Quarterly, which includes a collection of essays for informational purposes.
A collection of articles, essays and reports written by our experts.
Upcoming Events
Information on upcoming or recent events and conferences hosted by ELIG Gürkaynak Attorneys-at-Law.
ELIG Gürkaynak has hosted a Turkish competition law webinar in collaboration with Lexology. During the webinar, head of our competition law and regulatory practice, Mr. Gönenç Gürkaynak, introduces remedies and Phase II reviews under the Turkish merger control regime.
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions