Study: EU competition policies ignore workers

The failure of EU competition enforcers to assess and address the impact of growing corporate power on workers is contributing to lower employment, wages and working conditions, a new expert report for the European Trade Union Confederation (ETUC) shows.

Corporate power has reached an all-time high, with competition policies doing little to reverse this trend, enabling companies to hit consumers through excessive price rises and allowing dominant firms to exercise downward pressure on wages and working conditions.

Coming on top of previous EU austerity policies which lowered collective bargaining coverage, current competition policies weaken workers’ ability to bargain for a fair share of corporate profits. This increasing asymmetry between corporate and labour power has a direct impact on income distribution, therefore leading to higher levels of inequality in the EU.

Demonstrating the shortcomings of competition policies with a narrow focus on only business efficiency and consumer interests, the ETUC study highlights the need for scrutiny of EU competition policies from a labour market perspective.

The report, which is launched today, recommends:

  • The Commission should apply a test assessing any risk of an excessively imbalanced relation between companies and their workforce in any merger decisions
  • The introduction of behavioural remedies such as increased collective bargaining coverage and recognition of trade unions to rebalance the power relations in the labour market
  • Mergers should be refused when a labour market monopsony cannot be addressed by behavioural remedies
  • State aid control should include social conditionalities obliging companies receiving public support to demonstrate they contribute to quality jobs, good wages and a just transition for workers
  • The introduction of a public interest test into competition law, taking into account the ability of companies to charge prices exceeding marginal cost of production or obtain extraordinary profits

ETUC Confederal Secretary Isabelle Schömann said:

“Corporate power is at an all-time high, allowing business to hike their prices and profits at the same time as holding down wages and working conditions.

“The cost-of-living crisis caused by a combination of ‘greedflation’ and low pay shows the damaging consequences of excess corporate power for the majority of European citizens.

“Europe urgently requires a rebalancing of power between boardrooms and workers but the EU’s current competition policy is simply not up to the job.

“The Commission’s 2022 antitrust guidelines on collective agreements of solo self-employed represent a step in the right direction, but the interests of workers need to be taken into account across all areas of competition enforcement.

“Merger, antitrust and state aid control can no longer take place without any consideration of workers and the wider impact on the economy and society. Competition reforms are needed not only in the light of digital and green transitions, but also to ensure more socially responsible markets.”