How does the DCA measure concentration?

The DCA has multiple ways of measuring competition in an industry. Each way can gain an industry points: 1. Concentration ratio CR_4 CR_44 - share of the largest four firms in the total industry sales. CR_4 > 80% is considered problematic. 2. Concentration ratio CR_4 adjusted for imports. Many firms operate internationally. To account for this, CR_4 is adjusted for imports. 3. Entry ratio - share of new entrants as a percentage of number of firms in the industry. 4. Market share mobility - absolute changes in firms’ market share between two periods. 5. Productivity dispersion. Dispersion in productivity is compared with the average productivity dispersion in the entire economy. Should not be higher than 25%. 6. Wage premium. Difference in industry wages that cannot be explained by workers’ age, work experience, skill etc. Wage premium in excess of 15% higher than the benchmark industry = problematic. 7. ROI - industry profit after tax relative to the value of the fixed assets. Return on investment in excess of 50% percent higher than the average for all industries = Problematic. 8. Price level - Price index with EU9 = 100, calculated by correcting the Eurostat PPP price figures for differences in VAT and duties. Price index in excess of 3 percent higher than EU9 price index = Problematic. 9. Public regulation of the industry. Competition is normally weaker in regulated industries . 10. Subjective evaluation. Competition authority can undertake a qualitative assessment of the industry despite the quantitative indicators.