Employers beware: the Commission joins the ‘labour party’
Companies should review their recruitment and hiring policies and practices in anticipation of increased scrutiny of anti-competitive arrangements in labour markets. The European Commission has officially joined the hunt for ‘job cartels’ after identifying its first ever cartel in the labour market, and more decisions are expected.
Food for thought
According to the Commission’s press release, food delivery companies Delivery Hero and Glovo were fined EUR 329 million for allegedly:
- agreeing not to actively approach each other’s employees (a no-poach agreement),
- exchanging commercially sensitive information on, for instance, commercial strategies, prices, capacity, costs and product characteristics, and
- dividing the national markets for online food delivery among themselves.
The conduct predated Delivery Hero’s full acquisition of Glovo in July 2022. At the time, Delivery Hero held only a non-controlling minority stake in Glovo. According to the Commission, this minority shareholding had facilitated coordination between the two companies by giving Delivery Hero access to commercially sensitive information and enabling the companies to align their business strategies.
This case is therefore notable not only because it is the Commission’s first ever decision on a no-poach arrangement, but also because it marks the first time the Commission has sanctioned the “anti-competitive use of a minority share in a competing business”.
Late to the party
Although the Commission previously indicated it would take a tough stance on anticompetitive practices in labour markets (see our June 2024 newsletter), it has arrived relatively late to the labour enforcement ‘party’ with this first decision (with potentially more to follow).
National competition authorities have been paying close attention to wage-fixing and no-poach arrangements for quite some time now. Moreover, the European Court of Justice is about to shed more light on the antitrust assessment of no-poach clauses, following a Portuguese court’s request for a preliminary ruling.
The table below provides a non-exhaustive overview of ongoing and completed competition law investigations and court rulings involving labour-related aspects across the European Union, highlighting the significant experience national competition authorities and courts have developed in this area.
Better late than never?
Although perhaps late, the Commission’s decision, once published, will be a welcome addition to the guidance on how to assess anticompetitive practices in labour markets.
Companies should seize this opportunity to verify that their employment policies and practices comply with the antitrust rules. They should also check whether any of their minority investments in competitors or potential competitors could raise antitrust concerns.
