Concentration, Concentrative

Concentration has two related meanings. As a noun, along with concentrative, Competition Law term for an agreement (e.g., a merger or joint venture) that reduces the number of competitors or potential competitors in a given economic space. EU competition law generally uses the term to describe either a merger between competitors or the formation of a full function joint venture by competitors (a so-called concentrative joint venture). It may also be used to describe placing key competitive assets under joint control. If a concentration rises above the Turnover Thresholds (See Merger Regulation, European) it must be notified.

As an adjective or descriptor in economic terms it refers to how many competitors there are in a given market – that is to say a market with one or only a small number of competitors is concentrated, many competitors is un-concentrated. The concentration of a relevant market is often numerically described using the Herfindahl–Hirschman Index.