SSNIP Test

Small but Significant Non-transitory Increase in Price — The Hypothetical Monopolist Test

All Beverages
All Soft Drinks
Cola
🥤 Coca-Cola
🥤 Pepsi
🥤 RC Cola
🍋 Sprite
🧪 Dr Pepper
🍊 Fanta
⚡ Mountain Dew
🍺 Root Beer
🫚 Ginger Ale
💧 Water
🍊 Orange Juice
☕ Coffee
🍵 Tea
⚡ Energy Drink
🍺 Beer
🥛 Milk

What is the SSNIP Test?

The SSNIP test asks: if a hypothetical monopolist of a candidate market imposed a small (typically 5-10%) but significant and non-transitory price increase, would it be profitable?

If YES: The candidate market is a relevant antitrust market.
If NO: Expand the market definition to include substitutes until a SSNIP would be profitable.

Price Increase
5%
Consumer Response
Switch to Pepsi (within market) 15%
Switch to other soft drinks 8%
Switch to water/juice/other 3%
-5.20
Own-Price Elasticity of Demand
SSNIP Unprofitable
A 5% price increase would cause too many consumers to switch to substitutes, making it unprofitable. Expand the market definition.
Relevant Market: All Soft Drinks

Antitrust Implications

Market definition is often the most critical step in merger analysis. A narrower market definition means higher market shares and concentration, making an anticompetitive finding more likely.

The DOJ/FTC Horizontal Merger Guidelines use the SSNIP test (typically 5%) to define relevant markets before calculating HHI and assessing competitive effects.