A. Introduction
There are over 220 million people in the EU labor force.Footnote 1 They provide their physical and/or mental effort to businesses, who purchase the effort as one of their production inputs and in return pay wages. While this type of input is undeniably an extraordinary one in that it is inseparable from the human being,Footnote 2 the economic reality is that “labor markets are markets that respond to the logic of supply and demand as well as any other market.”Footnote 3 This means, among other things, that workers benefit when employers compete fiercely for their services because such competition leads to more favorable working conditions including higher wages. Conversely, when there is less competition between employers, working conditions tend to be worse.Footnote 4
Until recently, competition between employers had generally been believed sufficiently fierce.Footnote 5 New economic research has nevertheless shown that labor markets actually tend to be significantly concentrated and employers often have substantial market power.Footnote 6 A recent inquiry then specifically found that a sizeable share of European workers do find themselves in concentrated labor markets.Footnote 7 An ever-growing number of studies further show that workers are actually being exploitedFootnote 8 because they obtain a significantly lower share of their productivity than they would if employers competed vigorously.Footnote 9 For instance, a UK study found that workers offering their labor in the most concentrated decile of labor markets earn roughly ten percent less than comparable workers working for comparable employers in the least-concentrated decile.Footnote 10 The market power of employers is also often associated with economic inequality in society. This is because the absence of significant competition from other employers allows businesses to extract wealth from workers. At the same time, poor people receive their income primarily for their labor while rich people more often also have income from capital.Footnote 11
A field of law that possesses the tools to address market concentration and power, possibly including in labor markets, is competition law. Yet, as observed by Ezrachi et al., competition laws around the world are generally rarely enforced against employers.Footnote 12 This concerns also EU competition law with the Commission as its primary enforcer.Footnote 13 Araki et al. note that “up until recent years, there had been practically no enforcement” in this area.Footnote 14 To be sure, EU competition laws are written in vague language, which itself poses little obstacle to intervening against actions by employers that lead to and/or take advantage of weak competition between them—“restrictions of competition”—including agreements between employers, abuse of dominance by employers, and mergers between employers. It is also true that there have been some interventions by national competition authorities against the most flagrant restrictions of competition between employers in the form of wage-fixing and no-poach agreements.Footnote 15 These cases nevertheless remain rare and tend to focus on specialized settings such as professional sports.Footnote 16 In any case, there has so far been no actual intervention by the European Commission,Footnote 17 and the applicability of EU competition law to employer conduct has not been addressed by the Court of Justice as the ultimate interpreter of EU law either.Footnote 18
A possible obstacle to enforcement against employer conduct harming workers is that, under an influential account of EU competition law known as the consumer welfare paradigm, the law supposedly protects—the welfare of—consumers, not workers. Of course, the objectives of the law keep being discussed and some argue that “cracks have started to emerge” in “the broad acceptance of [the law’s] economic focus.”Footnote 19 The consumer welfare paradigm nevertheless appears well entrenched. For instance, the Court of Justice has recently declared in its Servizio Elettrico Nazionale judgment that the “ultimate objective” of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”)—and arguably of EU competition law as a wholeFootnote 20 —is “the well-being of … consumers.”Footnote 21 To be sure, competitive harm to workers does sometimes go hand in hand with harm to consumers.Footnote 22 These are the easy cases because protection of workers against employers is then readily reconcilable with the consumer welfare paradigm: Workers can be protected in order to protect consumers.Footnote 23 In other cases, nevertheless, competitive harm to workers does actually have no effect on consumers or even benefits them.Footnote 24 Due to the consumer welfare paradigm, such cases have sometimes been argued not to warrant competition law intervention.Footnote 25 In any case, “[i]t remains to be seen whether the protection of workers [themselves] will be included in any future enforcement cases in Europe ….”Footnote 26
Against this background, the present Article puts forward arguments for EU competition law to recognize harm suffered by workers from restricted competitionFootnote 27 between employersFootnote 28 as a form of harm relevant in itself. Or, to use a phrase from the Servizio Elettrico Nazionale judgment, for EU competition law to regard also the well-being of workers as an “ultimate objective warranting the intervention of competition law.”Footnote 29 The arguments put forward in this Article do not challenge the welfarist conception of competition law. To be sure, one could advocate for the protection of workers through competition law by calling this conception into question in the first place. For instance, the law can be argued to protect “competition as such,” “the competitive process,” or “an efficient competition structure” of the market.Footnote 30 An intervention against conduct restricting competition between employers would then be most directly motivated by the “harm” inflicted on competition, the process, or the structure rather than on workers themselves. It is nevertheless a question how effective this argumentative strategy would be given that the Court clearly stated in Servizio Elettrico Nazionale that such concepts are only a proxyFootnote 31 for the ultimate objective of people’s well-being.Footnote 32 The concepts have moreover been criticized for being too indeterminate to guide decision-making.Footnote 33 In any case, this Article focuses on arguments in favor of protecting workers that are reconcilable with a welfarist approach to competition law. They draw on suitable understandings of the very consumer welfare paradigm and on its application within competition law of the European Union and also of the United States as the birthplace of the paradigm.Footnote 34
The Article is organized as follows. Section B provides a conceptual framework for the rest of the Article by presenting consumer welfare as the predominant objective of EU competition law and by explicating the relationships between the welfare of various groups of market actors. Section C offers two lines of argument regarding why EU competition law should treat harm to workers as an intrinsically relevant reason for intervention. First, the law should intervene against business conduct inflicting competitive harm on any market counterparty for the benefit of those counterparties themselves. Second, in the alternative, the law should protect at least the individuals at the edges of the supply chain.Footnote 35 Section D concludes by summarizing and calling on EU competition law to protect workers for their own sake.
B. Competition Law and Welfare
This section provides a conceptual framework to be used by the following core part of the Article. It first tracks how consumer welfare has become the main objective of EU competition law and what this objective means. Subsequently this section discusses the various notions of welfare and the relationships between these notions. And, finally, it briefly addresses the connection between welfarist objectives of competition law and its substantive tests.
I. Consumer Welfare as the Predominant Objective of EU Competition Law
There is no complete consensus as to the objective(s) (to be) pursued by EU competition law.Footnote 36 To be sure, Protocol 27 to the Treaty on European Union states that the internal market to be established by the European Union pursuant to Article 3(3) of the Treaty “includes a system ensuring that competition is not distorted ….”Footnote 37 Yet, “the Treaty does not say explicitly why competition is a good thing, nor what the competition rules are supposed to achieve.”Footnote 38 As a result, various goals have been attributed to this field of law over the years. These include for instance ensuring economic freedom, promoting fairness and equality, and advancing market integration.Footnote 39
Nevertheless, since the “modernization” of EU competition law, which took place in the 1990s and 2000s, its predominant objective has become the protection of welfare, and especially that of consumers.Footnote 40 In its most basic economics-based understanding, consumer welfare corresponds with consumer surplus, which is the difference between how much a final consumer of a product would be maximally willing to pay for the product and how much she actually pays for it. The focus is then usually on the aggregate surplus of—mostly many—consumers purchasing the same product. This aggregate surplus is obviously bigger when prices are lower and the number of units purchased, “output,” is higher.Footnote 41 Conversely, price increases and output restrictions, as common outcomes of less fierce competition, decrease the surplus enjoyed by consumers and, thus, constitute their harm.
The introduction of consumer welfare into EU competition law is associated mainly with the European Commission, and in particular its Directorate-General for Competition, as the body responsible for competition policy and its enforcement. This introduction formed part of the substantive branch of the modernization process,Footnote 42 known as the “more economic” or “effects-based” approach to EU competition law.Footnote 43 This approach was at least in part motivated by criticism from academics, practitioners, and competition officials that often painted competition law of the European Union as lagging behind that of the United States.Footnote 44 The U.S. economy was seen as more competitive and the U.S. model of competition law as intellectually convincing.Footnote 45 Part of this model was a pursuit of welfare—and in particular that of consumersFootnote 46 —as the main objective. Thus, while this was not necessarily formally recognized,Footnote 47 adopting consumer welfare by EU competition law meant moving closer to U.S. law.Footnote 48 This is to say that understanding the role of welfarist objectives in U.S. antitrust may help us better understand also their position in EU competition law.
The more economic approach entailed, among other things, interpreting substantive rules across all three domains of competition law—that is, Article 101 TFEU, Article 102 TFEU, and the Merger Control RegulationFootnote 49 —as aiming to address competition-related harm to consumers.Footnote 50 Next to speeches by a number of EU Commissioners for Competition,Footnote 51 the pursuit of this objective has been enshrined also in various pieces of the Commission’s soft law. For instance, the 2004 guidelines on applying Article 101(3) TFEU posit that “[t]he objective of Article [101] is to protect competition on the market as a means of enhancing consumer welfare ….”Footnote 52 The 2023 guidelines on horizontal cooperation agreements similarly say that Article 101 TFEU aims to ensure that businesses do not restrict competition “to the ultimate detriment of consumers.”Footnote 53 The 2009 guidance on the Commission’s enforcement priorities in applying Article 102 TFEU to exclusionary conduct states that “the Commission will focus on those types of conduct that are most harmful to consumers ….”Footnote 54 The draft guidelines on the application of Article 102 TFEU published by the Commission in 2024 then state the following: “Pursuant to the Union Courts’ case law, Article 102 TFEU applies to all practices by dominant undertakings which may directly or indirectly harm the welfare of consumers ….”Footnote 55 And the guidelines on the assessment of horizontal mergers say that the relevant negative effect of a merger is the “potential harm to consumers” caused by a less intensive post-merger competition.Footnote 56
Harm to consumers may arise from exploitative as well as exclusionary business conduct.Footnote 57 Exploitative conduct harms consumers directly. It consists for instance in the charging of excessive prices discussed above. Exclusionary conduct forecloses competitors, which allows a subsequent exploitation of consumers. This is to say that a competition law system protecting consumer welfare does not intervene against business conduct harming rivals for the sake of the rivals themselves but only insofar as the conduct is detrimental also to consumers. As a matter of fact, “many forms of legitimate competition harm rivals but benefit customers.”Footnote 58 Articles 101 and 102 TFEU as well as the Merger Control Regulation address both exploitative and exclusionary conduct.
The Commission understands consumer welfare more broadly than captured by the basic account presented above. In particular, the metrics of welfare are not only price and output. Instead, the Commission appreciates that consumers may also benefit from being able to choose between multiple products. Products may moreover vary in terms of their quality. And producers are able to improve over time how their products satisfy the needs of consumers. That is why the Commission recognizes greater choice, higher quality and more product innovation as contributing to greater consumer welfare.Footnote 59 To be sure, the Commission does in its communication often focus only on price increases. This is nevertheless just for tractability purposes with the other dimensions of consumer welfare still being implicitly included.Footnote 60 This approach is followed also by the present Article, including as regards wage as the price of labor: A decrease in wages is to be understood as any worsening of working conditions.Footnote 61
Of course, it is not the Commission but the Court of Justice that has the ultimate say about the correct interpretation of EU competition law, including its objectives. The Court has nevertheless gradually embraced the Commission’s approach. Recently, the Court went all the way to describe EU competition law as fundamentally serving consumers. As mentioned above, in Servizio Elettrico Nazionale, the Court opined that “the well-being of … consumers must be regarded as constituting the ultimate objective justifying the intervention of competition law ….”Footnote 62 The Court followed the opinion of AG Rantos, which substantiated this objective by—beyond recounting the Court’s own case law—observing that competition law provisions in the Treaty mention consumers as possible victims of violationsFootnote 63 and allow negative effects of restricted competition to be counterbalanced by advantages that benefit consumers.Footnote 64 The opinion also noted that the “pre-eminence of ‘consumer well-being’ appears to be consistent with the Commission’s decision-making practice, under which consumer protection is the leitmotiv of any intervention of Article 102 TFEU and of competition law more generally.”Footnote 65 In addition, in Superleague Footnote 66 and Google Shopping,Footnote 67 the Court observed that Article 102 TFEU achieves its purpose by “sanctioning the conduct of undertakings in a dominant position that has the effect of hindering competition on the merits and is thus likely to cause direct harm to consumers, or which causes them harm indirectly by hindering or distorting that competition.”Footnote 68 It thus seems beyond dispute that the Court places extraordinary emphasis on the well-being of consumers.
To be sure, EU competition law does pursue also other objectives than consumer well-being and many argue that it should do to an even larger extent. At least for now, nevertheless, the welfarist perspective as well as the focus on consumers appears well entrenched. The present Article then discusses strategies to overcome the consumerist focus in order to protect also workers.
II. Consumer, Total, and Worker Welfare
We have seen that EU competition law is ostensibly supposed to protect the welfare of consumers. Before Section C puts forward the arguments why EU competition law should nonetheless intervene also against harm to workers, it will be helpful to elaborate on the various notions of welfare and the relationships between these notions.
As a preliminary point, welfare in plain language refers to people’s well-being or utility, that is, how good a life people are actually living.Footnote 69 It was already indicated above that competition economics uses the term in a narrower sense for economic surplus, that is the difference between gain and cost, which is supposed to represent the well-being.Footnote 70 For its tractability, this Article works with the economic welfare apparatus. The motivation is nevertheless to protect workers’ true well-being.
1. Consumer and Total Welfare
Let us first turn to the relationship between consumer and total welfare. This discussion will allow us to identify arguments in favor of consumer welfare, which—as we will see laterFootnote 71 — may be deployed also in support of worker welfare.
As mentioned, when buying a product from producers, consumers enjoy a surplus amounting to the difference between their valuation of the product and the price that they pay for it.Footnote 72 There is nevertheless also a surplus to be enjoyed by the producers: The difference between the price paid by consumers and the cost of producing the product. This “producer surplus” is also known as profit. The sum of consumer and producer surplus is called total surplus in general economics. In the context of competition law, the same concept is then usually referred to as total welfare.Footnote 73
The effect of a restriction of competition on consumer welfare is not always the same as its effect on total welfare. Most of the time, a restriction that decreases consumer welfare will at the same time decrease total welfare.Footnote 74 But sometimes it won’t because the decrease in consumer surplus will be offset by an even bigger increase in producer surplus.Footnote 75 This may happen for instance if a merger of two businesses leads to higher prices charged to consumers while lowering the costs of production, for example due to significant economies of scale. The choice between consumer and total welfare as objectives of competition law may thus have significant implications for which business conduct is in the end lawful and which is not.Footnote 76
While competition laws of the European Union and of the United States—as well as of other many other jurisdictionsFootnote 77 —prefer the pursuit of consumer welfare over total welfare, they are not very vocal about why. When one takes into account scholarship on the topic, it is nevertheless possible to identify two main advantages of consumer welfare.
First, consumer welfare focuses only on the effects of conduct on other actors than the businesses engaging in the conduct. If a competition law system pursued total welfare, it would not intervene against producer conduct that does harm consumers but that benefits producers themselves even more. In other words, total welfare “inclu[des] the welfare of the firm or firms causing the reduction in competition ….”Footnote 78 Consumer welfare, in contrast, “excludes from antitrust consideration the welfare of … the firms engaging in the allegedly anticompetitive behavior ….”Footnote 79 It is namely possible to view the eventual increase of the firms’ welfare at the expense of consumers as equivalent to stealing.Footnote 80 And “laws don’t normally instruct the constable to release wrongdoers if their gains are greater than their victims’ losses.”Footnote 81 Lande then reframes the same idea in terms of property rights: Consumers in his view have a “property right … to purchase competitively priced goods,”Footnote 82 which is why any eventual benefits to producers from charging supra-competitive prices are irrelevant.
Second, consumer welfare is arguably superior to total welfare in terms of distributive outcomes.Footnote 83 Consumers, the argument goes, are on average poorer than producers, represented by their shareholders and top managers.Footnote 84 Promotion of consumer welfare is therefore supposed to lead to a more equal society,Footnote 85 albeit at the cost of the overall pie not being as large as it could. This closely relates to the point that it is easier to muster political support for consumer welfare due to the popularity of ideas that it engenders.Footnote 86 While some have disparaged this development as “populism,”Footnote 87 others applaud that the choice of the objective reflects the will of the people. In either case, there are distributive reasons to pursue consumer rather than total welfare as the objective of competition law.Footnote 88
Consumer welfare is also sometimes said to be preferred over total welfare for concerns related to the ease of administration on the part of competition-law decision-makers. This justification appears rather weak. As observed for instance by Nazzini, administrability alone is hardly a sufficient justification for any objective of competition law.Footnote 89 To be sure, a more logical argument is sometimes being made that the actual deeper objective of competition law is total welfare and that the law in practice works with consumer welfare as “only” a better administrable proxy. Enforcers of competition rules thus under this perspective pursue consumer welfare because doing so is believed to enhance total welfare better than pursuing the latter directly. Even this argument, nevertheless, “seems … a post hoc rationalization … rather than an adequate defense.”Footnote 90 As indicated above, there is very little in EU competition law to suggest that its deeper objective is total welfare. That is why this possibility will not be further entertained below. The underlying idea that the law may protect the welfare of a certain group of market players as a proxy for another groupFootnote 91 will nevertheless prove useful for the following debate about the relationship between consumer welfare and worker welfare.
2. Consumer and Worker Welfare
The present section addresses the relationship between the welfare of workers and consumers. But before delving into this relationship as such, let us have a quick look at how welfare is divided in labor markets. The economic model described in the previous section considers the interaction between producers and consumers, that is, what happens in product markets. It is possible to conceptualize similarly the relationship between employers and workers. One obvious difference is that businesses this time act as buyers and individual people as sellers, which is the reverse of product markets. The welfare of workers then corresponds with the difference between their actual wage and the lowest wage that they would still accept to keep working for the employer.Footnote 92 In contrast, employer welfare is the difference between the workers’ contribution to the revenues of employers and the wages paid by employers to workers.Footnote 93 As explained above, this Article focuses on wage as a shorthand for also other dimensions of worker welfare.Footnote 94 These include for instance benefits, hours, working conditions, and training.Footnote 95
When it comes to the relationship between consumer and worker welfare, it is somewhat more complicated than the relationship between producer and consumer welfare or between worker and employer welfare. This is because consumers and workers are not directly interacting with each other or, in other words, they are not active on the same market. There nevertheless is a connection between them through the supply chain. In the most simple scenario, consumers and workers are just one link—or layer—of the chain apart: Workers sell their labor to businesses and the same businesses sell their products to consumers. Workers and consumers thus find themselves on different sides of those businesses.Footnote 96
The effects that competitive harm to workers—or, in fact, to any supplier—has on consumers may vary. Sometimes, worker harm will, ultimately, also bring about consumer harm.Footnote 97 There are two conditions for such a result.Footnote 98 First, the business is able to pay less for a unit of labor—that is, to suppress the wage rate—by reducing the amount of labor that it procures.Footnote 99 The lower amount of labor employed will lead to fewer units of output being produced by the business for the downstream product market. The business will not mind this lower output as long as the lost profit from the units not produced is outweighed by the greater profit margin that the suppressed wage makes possible on the units still produced. Second, other producers do not offset this resulting lower output.Footnote 100 There will thus be fewer units available to consumers, likely for a higher unit price.Footnote 101 It may then make sense to intervene against such a restriction of competition between employers even if competition law actually cares only about the welfare of consumers.
Nevertheless, crucially to our purposes, under other market conditions, wage suppression may have no effect on consumers on the downstream product market or even benefit them.Footnote 102 If there is fierce competition on the product market, other businesses will offset any output restrictions and the given business will thus need to sell for the low competitive price regardless of its actions against workers.Footnote 103 The underlying assumption that the business has power on the labor market but not on the product one is not a far-fetched one. It is possible that the businesses are located far apart and thus do not compete for workers, but at the same time deliver competing products to buyers in a greater, overlapping geographic area.Footnote 104 Marinescu and Posner give the example of mines: Mining businesses are often the only significant employers in the given local area but sell their products far away.Footnote 105 It may also be that the output-market rivals employ different production technology and, thus, each need a different type of personnel.Footnote 106
What is more, if the employer manages to achieve a lower price per unit of work without an effect on the number of units purchased,Footnote 107 it may actually have the incentive to decrease its prices and even increase its output down the stream,Footnote 108 which benefits consumers. This is recognized by one of the European Commission guidelines: “If increased buyer power lowers input costs without restricting … total output, then a proportion of these cost reductions are likely to be passed onto consumers in the form of lower prices.”Footnote 109 Under the traditional market power theory, such a lowering of hourly wage without a decrease of labor purchased is possible when the supply of labor is inelastic, that is, when the amount of labor offered by workers to employers does not respond to changes in the wage rate,Footnote 110 which may be for instance due to the workers having made sunk investments in their qualifications.Footnote 111
Alternatively to this traditional buyer power, employers may also have “bargaining leverage.” The traditional power stems from the ability of the buyer to set the price for the whole market, which leads to fewer units actually being sold than in a competitive market.Footnote 112 In contrast, bargaining leverage occurs between a particular buyer and a particular seller where the former “merely” threatens to reduce purchases from the seller.Footnote 113 The lower price is thus achieved by the threat alone, not by an actual decrease in the volume traded.Footnote 114 Employers wielding this power against workers thus have no reason to limit the downstream output and may even be motivated to produce more. Alexander and Salop give the example of a merger between two promoters of figure skating performances.Footnote 115 The skaters’ bargaining leverage will decline because they cannot anymore “play off the offers of the two promoters against each other.”Footnote 116 As a result, the merged promoter will be able to pay less to the skaters and, therefore, may charge less for tickets and increase the number of performances.
As mentioned, the present Article focuses on the competition-law relevance of worker harm as such. Whether the law recognizes this type of harm as a self-standing reason warranting intervention is essential in cases in which workers are harmed but consumers are not.Footnote 117 If harm to workers does not constitute such a reason in its own right, the respective conduct of employers is in principle lawful. In contrast, if the harm is indeed intrinsically relevant, the conduct is in principle unlawful. In Section C, this Article offers arguments supporting the latter option.
3. Welfare, Enforcement, and Rule-Making
Before proceeding to the arguments in favor of recognizing worker harm as relevant in itself, it ought to be emphasized that the recognition of any welfare objective by a competition law system does not necessarily mean that the objective needs to be considered as (part of) the test of lawfulness in individual cases.Footnote 118 To be sure, some advocates of welfarist competition law see no other option than such a case-by-case implementation.Footnote 119 It is nevertheless possible to take the welfare effects of business conduct into account when fashioning competition rules but, ultimately, design rules that will not test lawfulness against such effects.Footnote 120 This may be for instance because of second-order administrability-related concerns such as costliness or predictability of enforcement.Footnote 121
The relevance of worker harm to EU competition law argued for by the present Article is to be understood in this way: The law need not necessarily consider worker harm on a case by case basis; it is enough if the welfare of workers is taken into consideration in the design and interpretation of competition rules.
C. Intrinsic Relevance of Worker Harm
It is possible to employ two distinct lines of argument as to why harm to workers should be intrinsically relevant to EU competition-law decision-making about whether restrictions of competition between employers violate the law, even if there is no harm to consumers. First, one may argue that the law protects all market counterparties, including workers.Footnote 122 Second, it is possible to maintain that the law intervenes against anti-competitive conduct that harms non-entrepreneurial individuals at the edges of supply chains, that is, final consumers and workers.Footnote 123 These two lines of argument are not entirely conceptually compatible: They constitute alternative approaches, each starting from a different understanding of consumerist competition law. Both lines of argument nonetheless draw primarily on EU competition law as it has been interpreted by the EU Courts, the European Commission, and the scholarship. In part, they also suggest to reinterpret the law in line with U.S. antitrust, including American academic writings, as the birthplace of the consumer-welfare paradigm. Nevertheless, neither of the arguments challenges the welfarist nature of competition law: The law is assumed to exist in order to protect the well-being of certain market players.Footnote 124
I. The Law Protects All Market Counterparties
An argument why EU competition law should protect worker welfare as such, and thus intervene against restrictions of competition between employers that harm workers, can be based on the fact that the law frequently renders as unlawful conduct in markets where the counterparty is not final consumers. As discussed above, EU competition law ostensibly embraces the consumer welfare paradigm. Yet, as we are about to see, the law actually intervenes even in cases where the market counterparties are non-consumer buyers or sellers. This section will argue that there are compelling reasons for harm to any counterparty to warrant intervention in itself.
1. Any Buyer or Seller as the Market Counterparty
EU competition law intervenes in cases with various types of actors finding themselves on the other side of the market in which competition is restricted. At first blush, one might think that competition law protecting consumer welfare focuses only on business conduct on markets where the buyers are people who consume products for personal needs. After all, this is how the word consumer is understood in economic theory, which has been underlying competition-law thinking in the several last decades.Footnote 125 In fact, the economic model used to explain consumer welfare, as it was presented above, is usually framed in terms of final consumers, too. And even a large part of the EU legal order understands consumers in this way.Footnote 126 Conversely, actors who use products in relation to their business activity are generally not perceived as consumers. One might therefore expect “consumerist” EU competition law not to apply to conduct towards such business actors.
Upon a closer look, nevertheless, EU competition law does clearly apply also to the conduct of businesses on markets with other counterparties. This includes markets where the counterparty is business customers. In other words, competition rules are being enforced for instance against the fixing of prices of products that are purchased by other businesses or against mergers of companies that supply other companies. This has significant implications for the real-world scope of the law because most markets in the economy have business customers—rather than final consumers—on their buying side.Footnote 127
As a matter of fact, EU competition law does even terminologically count business buyers among consumers. In other words, the law does not embrace the literal meaning of the word consumer. Instead, the word has been used in a broader sense, when referring to anyone purchasing products, that is, even to those who do so not for personal but business use.
There are numerous examples of EU competition law embracing this broad interpretation. Consider for instance the Court of Justice’s reference to “intermediary and final consumers” in Servizio Elettrico Nazionale.Footnote 128 Similarly, the Merger Control Regulation talks about “intermediate and ultimate consumers.”Footnote 129 A comprehensive account of the scope of the concept is then provided by the Commission guidelines on the application of Article 101(3) TFEU:
The concept of “consumers” encompasses all direct or indirect users of the products covered by the agreement, including producers that use the products as an input, wholesalers, retailers and final consumers, i.e. natural persons who are acting for purposes which can be regarded as outside their trade or profession. In other words, consumers … are the customers of the parties to the agreement and subsequent purchasers. These customers can be undertakings as in the case of buyers of industrial machinery or an input for further processing or final consumers as for instance in the case of buyers of impulse ice-cream or bicycles.Footnote 130
Other Commission documents conveying a similar message include for instance the enforcement guidance on Article 102 TFEU,Footnote 131 the draft guidelines on Article 102 TFEU,Footnote 132 or the horizontal merger guidelines.Footnote 133
What is more, EU competition law is being applied even to the conduct of businesses on the buying side of a market,Footnote 134 that is, facing the sellers as their counterparty. For instance, Article 101(1)(a) TFEU talks about the fixing of not only selling prices but also purchasing prices.Footnote 135 As regards the Court of Justice, it held in T-Mobile that coordination among Dutch telecom operators on “the remuneration which those operators intend to pay for the services supplied to them”—that is, on their actions as buyers—could violate Article 101 TFEU.Footnote 136 Similarly, the Commission guidelines on horizontal cooperation discuss how Article 101 TFEU may be infringed by joint purchasing arrangements aiming to create a degree of buying power vis-à-vis suppliers.Footnote 137 And the Commission horizontal merger guidelines talk about the negative effects of increased buyer power of the merged entity.Footnote 138
The market counterparties do not need to be the direct targets of the conduct at stake, that is, be exploited.Footnote 139 To be sure, they may be targeted in such an immediate way: The conduct may itself entail a worsening of trading conditions for final consumers, business buyers or sellers on the other side of the market. Nevertheless, the conduct may instead be exclusionary, which is to say that its immediate target is business(es) on the same side of the market as the business engaging in the conduct. Even interventions against exclusionary conduct protect market counterparties insofar as such conduct facilitates their exploitation.Footnote 140
2. Derivative and Intrinsic Relevance of Counterparty Harm
The previous section showed that EU competition law regularly intervenes against business conduct even where the market counterparty is not final consumers but business buyers or sellers. It is a separate question why the law intervenes in these cases. One possibility is that such interventions actually aspire to protect final consumers, who may also ultimately get harmed by such conduct. This section entertains this possibility first. Alternatively, the interventions may be motivated by a desire to protect the other counterparties themselves.Footnote 141 This latter possibility is discussed subsequently and is essential for the argument made by this Article that the law should treat harm to workers as relevant intrinsically. Arguments in favor of this possibility will be put forward by the following section.
It is true that competition law could intervene against harm to business buyers or to sellers “only” because such harm further translates into harm to final consumers down the stream.Footnote 142 This motivation would be hardly disputable if the law actually directly associated unlawfulness of business conduct towards business buyers or towards sellers with harm to final consumers. Yet, in reality, the enforcers of EU competition law often neglect harm to final consumers, focusing instead only on harm to the market counterparties.Footnote 143 Nevertheless, one may see such interventions as animated by the welfare of final consumers even then: Harm to market counterparties can be seen as only a proxy for harm to final consumers. In other words, the translation of competitive harm suffered by market counterparties into final-consumer harm is then presumed rather than actually verified case by case. As noted by Stucke, proving harm to final consumers from selling conduct that takes place up the stream, especially as regards intermediary goods, is often difficult.Footnote 144 Harm to business buyers could then be potentially treated as a proxy for harm to final consumers. For instance, the Commission Discussion Paper on Article 102 observed that EU competition law intervenes against harm to intermediate buyers because this harm “is generally presumed to create harm to final consumers ….”Footnote 145
The same presumption could also be applied with regard to the conduct of buyers, that is, situations whether the market counterparty is sellers.Footnote 146 Stucke observes that proving that final consumers are harmed by the conduct of buyers is even more difficult than in the case of conduct of upstream sellers.Footnote 147 Consider in this context for instance the Court’s observation in T-Mobile that there doesn’t need to be “a direct effect on the prices paid by end users”Footnote 148 for a violation of Article 101 TFEU—by buyers—to occur. This formulation suggests that some—albeit possibly only indirect—effect on final consumers is actually required. A similar formulation appeared in the Commission’s decision in the merger case Aurubis Metallo, where the Commission observed that “the Merger Regulation and the Horizontal Merger Guidelines do not preclude the Commission from intervening in buyer power cases where direct harm to consumers cannot be demonstrated.”Footnote 149
The fact that seller harm carries no intrinsic relevance is suggested also by some documents of the European Commission. For instance, the part of the horizontal cooperation guidelines dealing with joint purchasing seems to care only about its the negative competitive effects on downstream customers:Footnote 150
If the members of the joint purchasing arrangement have a significant degree of buying power on the purchasing market, there is a risk that the arrangement may harm competition upstream, which may ultimately also cause harm to consumers downstream. For example, the exercise of joint buying power may harm suppliers’ investment incentives and force suppliers that do not have countervailing seller power to reduce the range or quality of products that they produce. This may lead to restrictive effects on competition in the upstream market, such as quality reductions, lessening of innovation efforts and ultimately sub-optimal supply. Moreover, retailers may exercise buying power and play off suppliers against each other by jointly limiting product variety in their shops, ultimately harming consumers downstream.Footnote 151
The guidelines have nothing to say about harm suffered by sellers themselves. Consequently, “a finding of infringement … seems almost conditional on the existence of … effects on downstream markets.”Footnote 152
The Commission took this position also in its contribution to a 2008 OECD competition-policy roundtable on monopsony and buyer power.Footnote 153 The contribution maintained that “competition between purchasers on the procurement side is [not] to be protected to the same extent as competition between suppliers on the sales side.”Footnote 154 This is because the “European Commission policy is that the ultimate end user of any product—the consumer—should be at the centre of competition law.”Footnote 155 The law should thus intervene only against buyer conduct that “has an effect on competition on the sales market ….”Footnote 156
Nevertheless, crucially to out purposes here, it is also possible to see harm to other market counterparties than final consumers as relevant in itself. For instance, the repeatedly mentioned judgment of the Court of Justice in Servizio Elettrico Nazionale states that the “ultimate objective” of EU competition law is “the well-being of both intermediary and final consumers.”Footnote 157 This formulation suggests that harm to intermediary consumers, that is, business buyers, matters in its own right, not only because it further leads to harm to final consumers.
Also as regards seller harm, it is possible to argue that it is undesirable intrinsically.Footnote 158 For instance, the Opinion of Advocate General Jacobs in AOK Bundesverband does focus on how restrictions of competition between buyers can have “negative consequences for the supply side of the relevant market.”Footnote 159 And the EU Commissioner for Competition has recently noted that buyer cartels that do not raise price for consumers are not a “victimless crime” because “they still have direct victims—even if it’s suppliers, not consumers, who suffer.”Footnote 160
Further, the Commission staff have recently observed that certain buyer conduct may violate competition rules even if consumers benefit from the conduct.Footnote 161 The respective contribution focused on the question whether eventual benefits to consumers play a role in the assessment of buyer conduct’s lawfulness.Footnote 162 As such, it did not directly address the question whether seller harm is relevant intrinsically. The conclusion that consumer benefits that “arise from the mere exercise of marker power [towards sellers] cannot be taken into account”Footnote 163 and, thus, cannot render the conduct lawful, nevertheless, strongly suggests that seller harm matters in itself.
EU competition law’s approach to cases where the harmed market counterparty is not final consumers can be helpfully looked at through the prism of U.S. antitrust law, as the birthplace of the consumer welfare objective. First of all, U.S. antitrust law, like EU competition law, perceives business buyers as consumers. Next, while cases concerning harm to sellers have admittedly also been relatively rare in the United States,Footnote 164 more and more commentators believe that “the antitrust laws condemn anticompetitive conduct that harms any trading partner, not just consumers.”Footnote 165 The law then considers as intrinsically relevant the welfare of anyone who sells to or buys from the businesses that restrict competition,Footnote 166 regardless of the restriction’s effects on final consumers.Footnote 167 This approach has been evidenced by case lawFootnote 168 as well as soft law of the federal enforcement agenciesFootnote 169 and argued to be a logical implication of the symmetric treatment of market power on the selling and buying side of the market.Footnote 170 Some authors have been calling the objective of this approach the protection or “counterparty welfare”Footnote 171 or “trading partner welfare.”Footnote 172
Please note that this interpretation of competition rules does not amount to an embrace of the total-welfare objective discussed above.Footnote 173 If competition law did pursue total welfare, it would take into account also the surplus of the very businesses that restrict competitionFootnote 174 —and of their competitors.Footnote 175 But that does not happen when the objective is counterparty welfare:Footnote 176 Only the welfare of actors on the other side of the market matters.
Some U.S. commentators, such as ShapiroFootnote 177 or Posner and Sunstein,Footnote 178 even argue that it is not necessary to replace the notion of consumer welfare with that of counterparty or trading partner welfare. In a world where most cases have up to now concerned reduced competition between sellers and, thus, harm to—intermediate or final—consumers, it is only natural that enforcers and commentators have been using terminology reflecting only this category of cases.Footnote 179 Perhaps we can keep referring to “consumers” even now, the argument goes, when we are becoming more aware of the category of cases concerning competition between buyers. The word “consumer” is then to be used as a term of art, encompassing not only intermediate and final buyers but also sellers.Footnote 180
3. In Favor of Intrinsic Relevance
The preceding section showed that, conceptually speaking, EU competition law may be intervening against business conduct harming business buyers or sellers as the market counterparties either because such conduct ultimately harms also final consumers or because the law assigns intrinsic relevance to the welfare of the buyers and sellers. This section offers arguments in favor of the latter position, that is, for EU competition law to protect market counterparties themselves. It thus argues in favor of treating as intrinsically relevant competitive harm suffered by any counterparty,Footnote 181 including workers.
To start with, one may see competitive harm to any market counterparty as intrinsically undesirable for the same reason for which some prefer consumer welfare over total welfare. Namely, as discussed above, when competition is restricted by businesses who face final consumers, only the welfare effects on the consumers count because taking into account the effects on the businesses would be like considering relevant the positive effects of a robbery on the robber.Footnote 182 There is then no reason to treat differently situations in which businesses that restrict competition are not facing final consumers but other counterparties, including workers.Footnote 183 Even then only the effect on the counterparty should matter.
It is a question whether assigning intrinsic relevance to any competitive harm inflected by businesses requires relinquishing of consumer welfare as the—primary—objective of EU competition law. As discussed, all counterparties may actually be in a certain sense seen as consumers. Namely, it is possible that the law has been referring to—both ultimate and intermediate—purchasers as its beneficiaries only because cases concerning restrictions on the buying side of markets have been rarely pursued. Perhaps now we can keep using the word “consumer” —albeit somewhat metaphoricallyFootnote 184 —for any market counterparty that gets harmed by anti-competitive conduct, even if that party finds itself on the selling side of the market, including workers. After all, the law has been already for some time using the word even for business buyers despite them not being covered by its literal meaning either. On the other hand, it may perhaps be more appropriate to explicitly adopt a new term in order to clearly signal that the law applies also to conduct harming selling market counterparties, which conduct moreover needs not ultimately harm final consumers.Footnote 185
In either case, assigning intrinsic relevance to competitive harm to market counterparties is arguably reconcilable with the perspective that the objective of competition law is to protect the “competitive process”Footnote 186 or “competition as such,”Footnote 187 which perspective is common in EU competition law.Footnote 188 In fact, the focus on market counterparty harm can be seen as providing a useful limiting principle as to which restrictions of competition to regard as undesirable. Competition law is then “about protecting the competitive process and does so by considering the impact of conduct on those who trade with the allegedly anticompetitive actor.”Footnote 189 Such a close link between the competitive process and counterparty welfare has been advanced for instance by Shapiro, who argues that U.S. law should be guided by the “protecting competition standard,” whereby “[a] business practice is judged to be anticompetitive if it harms trading parties on the other side of the market as a result of disrupting the competitive process.”Footnote 190
II. The Law Protects Individuals at the Edges of Supply Chains
Protecting all market counterparties themselves, as it was discussed in the previous section, means assigning intrinsic value to the welfare of these counterparties, even if they are actually businesses. Should such an approach be perceived too unorthodox, one may pursue a different line of argument, which excludes businesses from ultimate beneficiaries of competition law. That is to say that this line of argument—unlike the one discussed above—is based on the assumption that competition law does actually assign a special status to final consumers, ultimately trying to protect their well-being. One can then argue that the law should assign the same status also to workers because they resemble final consumers in crucial ways.Footnote 191 This section first discusses how these similarities justify the special treatment of workers. And, subsequently, the section presents further support to the proposition of treating worker harm in the same way as final-consumer harm based on how competition law applies to the own conduct of workers and final consumers.
1. Similarity Between Workers and Final Consumers
Both final consumers and workers are invariably individual people, which distinguishes them from producers and employers, who tend to be business corporations. The fact that individuals enjoy a special position in competition law has been recognized for instance by the United States Supreme Court, which observed in its Sonotone judgment that antitrust law is “primarily … a remedy for the people of the United States as individuals.”Footnote 192 Former EU Commissioner for Competition Margrethe Vestager has then recently even distinguished the very restrictions of competition between employers, that is, buyers of labor, from those between buyers of other input by noting that the former “have a very direct effect on individuals ….”Footnote 193
Admittedly, treating final consumers and workers distinctively due to their character as individual human beings is not without its problems because also businesses are owned by individual people—that is, shareholders—who effectively are the ultimate recipients of producer and employer welfare. It may thus perhaps be more precise to say that the law prioritizes protection of individuals who do not engage in commercial activity over those who do—through owning businesses. Advocate General Jacobs in this vein observed in Albany that “there is a significant functional difference between an employee and an undertaking providing services” among other things because “[e]mployees normally do not bear the direct commercial risk of a given transaction.”Footnote 194 A different way of looking at the issue is that the economic interests of both workers and final consumers—unlike those of shareholders—are in a certain sense opposed to the businesses with which they interact.Footnote 195
In addition, most workers—like most final consumers—are poorer than most shareholders.Footnote 196 We have already discussed that EU competition law’s preference of consumer welfare over total welfare may be driven by its distributive favoring of final consumers over producers. Odudu observes that, similarly, “[l]abour can be seen as a group favoured against employers ….”Footnote 197
As a result, insofar as the embrace of consumer welfare as a goal of EU competition law is driven by an ambition to protect non-entrepreneurial individuals who are generally less well-off than the owners of the businesses that the individuals engage with, it seems only logical that worker welfare ought to be embraced, too.Footnote 198 That is to say that “[competition] law should be seen not merely as protecting consumers from producers, but also labor from capital.”Footnote 199
2. The Law Lets Workers Restrict Competition
The position that the law protects both final consumers and workers can be further supported on the basis of how the law treats the own conduct of these actors. Namely, EU competition law—like U.S. antitrust lawFootnote 200 —allows workers to restrict competition between themselves, that is, on the selling side of labor markets, through collective action and, thus, to improve their welfare. As often argued, such collective action “could be construed as a labour cartel, fettering the operation of free market forces between [the workers] over the terms on which they offer their labour in the market for their services.”Footnote 201 That is to say that certain workers’ conduct is lawful under EU law even though the very same conduct would violate the law if it was performed by businesses. The law arguably operates in this way in order to promote the welfare of workers.
The immunity of collective worker action from EU competition rules is guaranteed primarily by a doctrine fashioned by the Court in case Albany.Footnote 202 There the Court famously recognized that, even though “certain restrictions of competition are inherent in collective agreements between organisations representing employers and workers,”Footnote 203 such agreements fall outside the scope of Article 101(1) TFEU.Footnote 204 The condition is that the purpose of the agreement is “to improve conditions of work and employment,”Footnote 205 whereas such improvements encompass also better remuneration.Footnote 206 The Albany doctrine has been consistently upheld by later case law.Footnote 207
The exception of collective labor action from competition law may be harmful to downstream buyers, potentially including final consumers.Footnote 208 To be sure, under some circumstances unionization and the ensuing wage increases may benefit the buyers. This will be the case when the wage rate increases from a sub-competitive level, that is, when employers have power on the given labor market.Footnote 209 Coordination among workers will then countervail this power.Footnote 210 The negotiated higher wage rate will mean that more people will be willing to work.Footnote 211 And this will then translate into increased productionFootnote 212 —and thus lower price—for buyers down the stream.
Nevertheless, if wages are not suppressed to start with, labor organizing to negotiate higher wages will likely increase downstream prices and decrease output.Footnote 213 This is because, as in the case of too low wages,Footnote 214 fewer people will get employed. Only this time the effect will be driven by the reaction of employers: They will not be willing to employ as many workers as without the inflated wage. And, as discussed above, fewer employees mean lower product output, which in turn generally means higher prices and lower welfare for buyers. The same effect may obtain also if employers do actually have market power but, at the same time, the power of organized workers is so much greater that it not only countervails the employer power but raises wages so high that even fewer workers get employed than if the wages were as low as employers would wish.Footnote 215 This is all to say that the exemption of labor coordination from EU competition law may not always benefit final consumers.
This potential harmful effect of collective worker action on final consumers can be illustrated by the U.S. antitrust case Meat Cutters v. Jewel Tea Co. Footnote 216 The case concerned a collective bargaining agreement between a food store and unionized butchers that limited the operating hours of the store’s meat departments. The Supreme Court concluded that the agreement was covered by the exemption of union-employer agreements from antitrust law even though it effectively harmed final consumers by limiting when they could do their shopping.
The fact that the immunity applies to collective worker action regardless of its effect on consumers suggests that the law does care about the welfare of workers as such, and not only as a proxy for the welfare of consumers. Kim argues that this is indeed the case in the United States.Footnote 217 One could perhaps understand the immunity for collective action by workers as a mirror image of the immunity for collective action by final consumers. Namely, EU competition law does not apply to the conduct of final consumers.Footnote 218 Eventual buying cartels among such consumers do thus not violate competition rulesFootnote 219 even if they actually harm their suppliers and reduce efficiency.Footnote 220 The exclusion of coordination among workers from competition law may then be seen as the same maneuver, just at the other end of the supply chain: Competition law allows restrictions of competition between non-entrepreneur individuals at the very edges of supply chains in order to promote the welfare of these individuals.Footnote 221
To be sure, one could once again argue that EU competition law does allow workers to improve their welfare by restricting competition only in order to, ultimately, benefit—final—consumers.Footnote 222 This argument is based on the assumption that the interests of workers and consumers are aligned so often that the occasional conflict is acceptable.Footnote 223 The question how frequently such conflicts actually arise, nevertheless, “has received very little theoretical and empirical examination.”Footnote 224 Moreover, the EU Courts have “expressly established that cartels meant to react to unfair competition practices are unlawful ….”Footnote 225 It is then a question why such cartels would not be justified by consumer welfare while worker cartels would. And, in any case, there is no basis for this interpretation in the law, with the Court’s motivation for the Albany exception not mentioning consumers at all. Rather, the Court says that competition law needs to be disapplied so that it does not stay in the way of social policy objectives that concern workers themselves.
The fact that the law allows workers to restrict competition for their own benefit can be advanced in support of the law recognizing competitive harm suffered by workers as relevant in itself. More specifically, as shown in this section, an increase in worker welfare by restricting competition between workers does already serve as a shield against being found in violation of the law. There is then no apparent reason why a decrease in worker welfare following from a restriction of competition on the other side of the labor market should not play the role of a sword, that is, make this restriction in principle infringe EU competition law.Footnote 226 Or, to put it differently, when it comes to final consumers, EU competition law allows them to restrict competition between themselves as well as protects them from harmful restrictions of competition between their market counterparties, that is, sellers of final goods and services. So why would only the former but not the latter hold for workers?
D. Conclusion
There are many compelling reasons to treat competitive harm inflicted upon workers by employers as intrinsically relevant under EU competition law. Generally speaking, “[t]here is no a priori reason for thinking that worker harm is less severe than consumer harm.”Footnote 227 Quite to the contrary. Workers tend to be disadvantaged in their relationships with employers by the unique frictions that exist in labor markets such as the costs of searching jobs or of moving.Footnote 228 Crucially, most people receive income primarily from work,Footnote 229 and this dependence on wage to buy what they needFootnote 230 puts workers in a weaker position still.Footnote 231 For many, being able to negotiate a fair wage is even a matter of survival.Footnote 232 Insofar as restrictions of competition between employers harm primarily those less well-off, they may also exacerbate economic inequality.Footnote 233 Further, most of us spend significant part of our time at work, which is why not just lower wages but also other worsened working conditions may greatly impair our well-being.Footnote 234 And, last but not least, people derive from work also all sorts of other benefits that may wane when employers are insufficiently constrained by competitors: “[S]tatus, a sense of meaning, important personal relationships, and mental health benefits.”Footnote 235
As shown by this Article, it also possible to make arguments for the intrinsic relevance of worker harm to EU competition law that are more firmly embedded in the framework of the law, ostensibly based on the consumer welfare paradigm. The first possible line of argument concerns not only workers but all market counterparties of businesses that restrict competition. EU competition law often intervenes in cases where the market counterparties are not final consumers but business buyers or sellers, including workers. The law may then well be protecting these market counterparties themselves rather than caring about the harm eventually ensuing to final consumers. Alternatively, it is possible to argue that workers resemble final consumers by being non-entrepreneurial individuals at the edges of supply chains who tend to be poorer than shareholders and that the ultimate objective warranting the intervention of EU competition law is the protection of such individuals.Footnote 236 This perspective is supported also by the fact that the law allows workers, just like final consumers, to restrict competition between themselves.
This Article has discussed whether competitive harm inflicted by employers upon workers should be considered as relevant in itself, arguing in the affirmative. Even if that is the case, nevertheless, it is still a question whether such harm can be offset by eventual benefits to downstream consumers. While this question does in many ways relate to the discussion here, the underlying issue of balancing competitive effects across different markets is a complex one and arguably requires a separate analysis. Still, to provide at least a provisional assessment, it seems that there are sound arguments in favor of worker harm in principle not being offsetable by consumer benefits. Consider for instance the abovementionedFootnote 237 remark in the Competition Policy Brief that “cost savings that arise from the mere exercise of market power cannot be taken into account as source of possible pro-competitive effects.”Footnote 238 This point has been made in the context of U.S. antitrust for instance by Posner: “Antitrust law prohibits anticompetitive behavior that causes harm to market participants that it targets; it doesn’t matter whether others are incidentally benefited or not.”Footnote 239 It is nevertheless also true that the Commission horizontal cooperation guidelines do make the general remark that buying power resulting from buyer agreements does not give rise to competition concerns in the first place if it leads to “lower prices, more variety or better quality products for consumers.”Footnote 240 Similarly, the horizontal merger guidelines say that increased buying power may be desirable if the lower input costs are “passed onto consumers in the form of lower prices.”Footnote 241 All in all, a further inquiry into the EU Courts’ case law, the Commission’s decision-making practice and soft law as well as scholarship is necessary to fully understand the role of consumer benefits in cases against employers.
In any case, there has so far been virtually no enforcement or rule-making under EU competition law at the level of the Union against employers.Footnote 242 This lack of action becomes particularly peculiar when compared with the situation in the United States. To be sure, even there interventions against restrictions of competition between employers have not been that common.Footnote 243 Still, the tide has clearly turned over the last decade and the two federal competition authorities have been increasingly active in this area.Footnote 244 They have for instance been intervening against no-poach agreementsFootnote 245 and inserted provisions concerning labor markets in the merger guidelines.Footnote 246 What is more, such interventions have been motivated by the welfare of workers themselves.Footnote 247 The discrepancy between the approach of EU and U.S. competition law to labor markets is all the more remarkable given that in other areas of the economy it is actually the former that tends to be more interventionist. One should also not forget that the consumer welfare paradigm—supposedly standing in the way of protecting European workers by competition lawFootnote 248 —has been imported to Europe from the very United States. One may therefore wonder whether the Union, and in particular the Commission, isn’t being more Catholic than the Pope.Footnote 249 It would certainly seem so if we did not see action to protect workers through competition law soon and if this action was not warranted by harm to workers as such.
Let us conclude this Article by applying its message to a passage from the Commission’s recent Competition Policy Brief on labor markets. The passage reads as follows:
From an economic point of view, wage-fixing is detrimental to employees, whose wages and other benefits are depressed. Wage-fixing firms maximize joint profits by setting wages equal to the monopsony wage level via a reduction of labour demand, with the side effect of reducing output and increasing downstream prices to the detriment of consumers.Footnote 250
As regards the notion of the “side effect,” one could perhaps argue that an eventual negative effect of employer conduct on consumers is only secondary in the sense that consumers do not find themselves on the market on which competition is being restricted. The law could then still intervene against the employer conduct as the source of the undesirable side effect even if the ultimate objective of competition law was only the protection of consumers. Nevertheless, this Article suggests a different interpretation: The negative effects of employer conduct on consumers are only side effects in the sense that they do not matter for whether the conduct is unlawful. It is enough that there is harm to workers.
Acknowledgments
My gratitude goes to Victoria Daskalova, Zlatina Georgieva, Giorgio Monti, Amit Zac, colleagues from the Sustainable Global Economic Law project, and participants to the 2024 ASCOLA conference in Würzburg and to the 2024 CLEEN workshop in Tilburg for comments on earlier drafts and presentations. All mistakes and omissions are my own.
Competing Interests
The author declares none.
Funding Statement
No specific funding has been declared for this Article.
Jan Broulík is Assistant Professor of European Law at the Amsterdam Law School. His primary research focuses on EU competition law, with a current emphasis on the application of competition law to labor markets.
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