COMPETITION • FRENCH AND EUROPEAN LAW • MERGERS
The Herfindahl-Hirschmann index (HHI), which is equal to the sum of the squares of the individual market shares of each of the undertakings active on the market, varies between 0 (atomistic market) and 10,000 (pure monopoly). The delta, i.e. the change in the HHI, is a useful proxy for the change in concentration directly brought about by the merger.
In its Guidelines on the Assessment of Horizontal and Non-Horizontal Mergers, the Commission considers that it is unlikely for a horizontal merger to raise competition issues on a market where the post-merger HHI is less than 1,000, or between 1,000 and 2,000 with a delta below 250, or above 1,000 with a delta below 150. On the other hand, in spite of the existence of combined market shares below 30%, a concentration may hinder competition if the HHI and delta values are above those defined as initial indicators of the absence of competition concerns in the guidelines. A concentration raises no competition issues where the post-merger HHI is less than 2,000. According to the General Court, although exceeding the thresholds of the Herfindahl-Hirschmann index (HHI) does not give rise to the presumption of the existence of competition issues, the higher the excess, the greater the likelihood of such problems.