The role of supply side substitution in setting antitrust fines in the UK

In the UK, the value of the fine imposed on an undertaking which has infringed the Competition Act 1998 is based on the ‘relevant turnover’ of the undertaking. This includes any turnover the undertaking receives from demand and supply side substitutes to the products over which the infringing conduct occurred. The UK is unusual in explicitly considering substitutes in the relevant turnover rather than focusing only on the turnover the undertaking receives from the products in relation to which the infringing conduct occurred. Until recently, supply side substitutes have not featured heavily in decisions of UK competition authorities when defining relevant markets for the purpose of setting fines. However, the inclusion of turnover from substitutes can have a large impact on the size of the fine, as reflected in a recent decision