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HHI |
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This is done by using the Herfindahl-Hirschman Index (HHI; see sidebar, page 64), which is calculated by squaring the percentage of the market share of each company in a specific industry, then summing the squares. Under the merger guidelines, determination of monopoly power requires a two-step process: The market is defined and then a formula which uses market-share data, the Herfindahl-Hirschman Index, is used to determine market concentration. Ultimately, however, the FTC staff was bound by precedent to apply the Herfindahl-Hirschman Index, a formula the FTC uses to assess market concentration," said Greehey. |
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