Legal Definitions - geographic market

The geographic market refers to the specific physical area where buyers and sellers of a particular product or service interact and compete. This area is defined by considering where customers would realistically go to purchase the product or service, and where suppliers would realistically offer it. It's a crucial concept in antitrust law, used to assess the potential impact of mergers, acquisitions, or business practices on competition within that defined region.

Here are some examples illustrating the concept of a geographic market:

• Local Grocery Stores: Imagine two independent grocery stores located within the same small town decide to merge. When antitrust regulators evaluate this merger, they would likely define the geographic market as that specific town and its immediate surrounding areas. This is because most residents typically do their routine grocery shopping at stores conveniently located within a short driving distance from their homes. Customers are generally unwilling to travel to a neighboring town for groceries unless there's a significant price difference or unique offering, meaning the primary competition occurs within the local area.

• Online Software Services: Consider a company that provides cloud-based project management software. Since the service is delivered digitally over the internet, customers from virtually anywhere in the world can access and use it. There are no physical barriers to entry for customers, and suppliers can serve a global clientele. In this scenario, the geographic market for such a service would likely be defined as global, as competition for customers is not limited by national or regional borders.

• Specialized Medical Procedures: For highly specialized medical procedures, such as rare organ transplants, the geographic market might be much broader than for general medical care. Patients requiring such specialized treatment are often willing to travel across states or even internationally to reach a hospital or medical center with the necessary expertise and facilities. Therefore, the competition among providers of these specific, complex medical services extends over a wide regional or even national area.