Need a pay rise? CMA publishes report on market power in labour markets

 Need a pay rise? CMA publishes report on market power in labour markets

The Competition and Markets Authority (CMA) has published its first report prepared by its Microeconomics Unit, on competition and market power in UK labour markets.
The report examines employer market power and concentration in the labour market. It considers the ability of a firm to pay its workers less than the value of their contribution to the value of the firm’s output.

The CMA finds that market concentration in the labour market has remained roughly constant over the last 20 years. On average, wages are 10% lower in the most concentrated markets, compared to the least.
The report also examines the increase in hybrid and flexible working and the increasing importance of the gig economy.

The report raises a number of unanswered questions which will no doubt inform analysis by policy makers:

·        What lies behind the geographical differences in labour market concentration?
·        How do mergers and acquisitions affect labour market concentration and wages in the UK?
·        What would the impact of changing labour market policies (for example, on non-compete agreements, pay setting and the minimum wage) be for worker mobility and wages?

Competition and market power in UK labour markets - GOV.UK (www.gov.uk)

CMA investigation into fine fragrances cartel

 

CMA investigation into fine fragrances cartel

The CMA has issued an update in its investigation into suspected infringements of the Chapter I prohibition of the Competition Act 1998 involving suppliers of fragrances and fragrance ingredients.

The CMA launched its investigation in March 2023. The investigation was launched with a series of dawn raids alongside the European Commission, the Swiss Competition Commission and the US Department of Justice’s antitrust division. These led to four separate investigations by these antitrust agencies.

The firms under investigation are Firmenich International SA, Givaudan SA, International Flavours & Fragrances Inc and Symrise AG, and their group entities, including UK subsidiaries.

The CMA has extended the investigation to include suspected unlawful coordination between Firmenich International SA, Givaudan SA and International Flavours & Fragrances Inc involving arrangements relating to the hiring or recruitment of certain staff.

Reflecting similar concerns about ‘anti-poaching’ agreements in October, the CMA launched a separate probe into the BBC, ITV and several production companies over concerns about recruiting freelancers.

The CMA expects to publish its next update on the investigation in autumn 2024.

https://www.gov.uk/cma-cases/suspected-anti-competitive-conduct-in-relation-to-fragrances-and-fragrance-ingredients-51257

Challenges to European Commission’s gatekeeper designations

8 January saw the publication of appeals by Apple and Meta against the European Commission's September 2023 decisions designating them as ‘gatekeepers’ for the purposes of Regulation 2022/1925 on contestable and fair markets in the digital sector (Digital Markets Act (DMA)).

Apple’s designation is in relation to its operating system iOS and its online intermediation service App Store.  Apple claims the designation should be annulled insofar as it specified Apple’s operating system iOS as an important gateway for business users to reach end users, and insofar as it imposes on Apple an obligation to comply with the interoperability obligations of Article 6(7) of the DMA.  Apple alternatively asks the General Court to declare Article 6(7) inapplicable pursuant to Article 277 of the TFEU claiming that Article 6(7) is inconsistent with the requirements of the European Charter of Fundamental Rights and the principle of proportionality.  It further alleges that the Commission misinterpreted and misapplied the DMA and made material factual errors in reaching the conclusions that (1) App Store is single core platform service that constitutes an important gateway for business users to reach end users and (2) Apple iMessage is a number-independent interpersonal communications service.

In a separate appeal, Apple is challenging the Commission’s decision to launch a market investigation to determine whether its instant messaging service iMessage falls under the scope of the DMA.

Details have also been published of Meta’s arguments for challenging certain aspects of its designation.  It disputes the Commission’s conclusions that Facebook Messenger and Facebook Marketplace constitute core platform services pursuant to Article 3(9) of the DMA.

ByteDance (owner of Tik Tok) has challenged the platform’s gatekeeper designation outright.   It disputes findings that it has an “entrenched” position in the market.  It has also sought interim measures from the General Court to suspend its obligations under the DMA pending a challenge against its gatekeeper designation.

Microsoft, Google and Amazon have not brought appeals against their designations or the inclusion of their core platform services.

Case T-1080/23 – Apple v Commission (OJ C/2024/563)

Case T-1079/23 – Apple v Commission (OJ C/2024/562)

Case T-1078/23 – Meta v Commission (OJ C/2024/561)