Merger control in labour markets: Considerations from an enforcer’s perspective

The call for expanding competition enforcement in labour markets is hard to ignore. Several authorities worldwide have increased their vigilance regarding possible labour market distortions. In practice, however, merger control enforcement in labour markets is rare or as good as nonexistent in most jurisdictions. Although academics have proposed instruments to measure labour market concentration, identify and quantify potential theories of harm, and facilitate the investigation process, converting all these insights into practice raises several challenges.

The goal of this article is to identify some of these challenges from an enforcer’s point of view and to contribute to the debate on how to address them.

I. Introduction 1. The increasing interest in the impact of competition policy on labour markets and employment started some years ago. New studies such as the work of De Loecker and Eeckhout (2017, 2018), [1] Hall (2018), [2] Díez et al. (2018) [3] and Koltay et al. (2022) [4] have provided empirical evidence of increasing global market power and profit margins. Despite differences across continents and countries, these observations are global and present in many different sectors. While profit margins have significantly increased over the past three decades, this did not seem to benefit workers with a declining labour share and lower wage rates over time. The conjunction of these events raises the follow-up question amongst academics of whether there is a causal link between them, and

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