depends on how different from one another are the offered commodities in character or use, how far buyers will go to substitute one commodity for another.”).
Cross-elasticity of demand turns on consumers’ sensitivity to an increase in price. See Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210, 218 (D.C. Cir. 1986); du Pont, 351 U.S. at 400 (“An element for consideration as to cross-elasticity of demand between products is the responsiveness of the sales of one product to price changes of the other.”). That is, “[i]f an increase in the price for product A causes a substantial number of customers to switch to product B, the products compete in the same market.” Sysco 113 F. Supp. 3d at 25. “The higher these cross-elasticities, the more likely it is that similar products . . . are to be counted in the relevant market.” Rothery Storage, 792 F.2d at 218.
Courts generally consider two categories of evidence when defining the relevant product market: the “practical indicia” identified by the Supreme Court in Brown Shoe Company v. United States, 370 U.S. 294 (1962), and quantitative evidence from expert economists. The Brown Shoe “practical indicia” include: (1) industry or public recognition, (2) the product’s peculiar characteristics and uses, (3) unique production facilities, (4) distinct customers, (5) distinct prices, (6) sensitivity to price changes, and (7) specialized vendors. Id. at 325. According to the D.C. Circuit, “[t]hese indicia seem to be evidentiary proxies for direct proof of substitutability.” Rothery Storage, 792 F.2d at 218. And while “[t]he Brown Shoe practical indicia may indeed be ‘old school’” antitrust law, they bind the court. Sysco, 113 F. Supp. 3d at 27 n.2.[1]
Quantitative evidence of market definition typically comes in the form of an expert economist conducting a “hypothetical monopolist test.” Id. at 33 (internal quotation marks
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- ↑ Although some jurists have questioned the continued reliance on Brown Shoe to define markets, see FTC v. Whole Foods Market., Inc., 548 F.3d 1028, 1058–59 (D.C. Cir. 2008) (Kavanaugh, J., dissenting), Google has not urged the court to abandon consideration of them, see GTB at 6–23; Google’s Proposed Conclusions of Law, ECF No. 909 [hereinafter GCL], at 1–13; Google’s Resp. Proposed Conclusions of Law, ECF No. 911 [hereinafter GRCL], at 3–7.
