Europe Uses Competition Law to Protect Workers as U.S. Under Trump Retreats
Research fellow Claire Lavin discusses how Europe is increasingly using antitrust enforcement to protect workers' rights, even as the U.S. shows signs of retreating from similar efforts."
Earlier this year, competition authorities in the UK and Portugal fined companies for anticompetitive practices in their treatment of workers. The two decisions cement a major change in practice in Europe, where antitrust enforcers have generally steered clear of involvement in labor markets. The moves follow a landmark ban by the U.S. Federal Trade Commission on non-compete agreements, first proposed in January 2023.
In early April, the UK Competition Authority imposed fines of £4 million on sports broadcasters for exchanging sensitive information concerning freelance workers. In February, the Portuguese Competition Authority fined three companies €3 million each for bilateral no-poach agreements.
Margrethe Vestager, who oversaw competition enforcement for the European Commission for a decade until last year, first began to warn against wage-fixing and no-poach agreements in 2021. That same year, the Portuguese competition authority issued the first comprehensive EU report on these two issues, drawing from U.S. practice.
This increased focus on using antitrust tools to protect European workers comes at a time when the United States under President Trump appears to be backtracking from the advances made under President Biden.
The FTC’s landmark ban of non-compete provisions is facing two legal challenges and last month, the FTC filed motions to stay proceedings arguing that it needs time to reconsider the defense of the rule. Such an action suggests the Commission will stop defending the rule, which should come as no surprise given that new FTC Chair Andrew Ferguson strongly opposed the rule as a sitting commissioner last year.
Such a retreat would be a huge setback for workers and entrepreneurs in the U.S. Tens of millions of Americans are bound by non-compete clauses. These contractual provisions prevent workers from leaving their existing job for a better employment opportunity.
U.S. federal antitrust agencies have been trailblazers in enforcing competition laws to protect working people. In 2016, the FTC and Department of Justice issued guidelines explicitly saying that horizontal agreements in the form of wage-fixing and no-poach agreements were not only illegal but particularly harmful to workers. They also made clear that any exchange of sensitive information among potential employers of the same person could be considered as unlawful. Several years later, the FTC expanded the range of illegal practices to non-compete provisions in employment contracts.
The move to cover non-compete restrictions followed a broad organizing effort led by Open Markets in 2019, including the creation of a public interest coalition. Thankfully, several U.S. states have passed or are considering bills to ban non-compete provisions in employment contracts. Legislatures in New York and Vermont proposed bills early this year and Wyoming passed a new law last month.
On the other side of the Atlantic, EU countries are currently focusing on conducts that are considered most harmful to the rights and wellbeing of workers, especially no-poach and wage-fixing agreements and the exchange of sensitive information among rival employers.
In 2024, the European Commission published a policy brief highlighting the concentration of EU labor markets and the risk of market power reinforcement through no-poach and wage-fixing. It also announced two ongoing investigations in 2024. The same year, the UK Competition Authority released its own report on competition and market power in labor markets.
More European actions are in the works. The Swiss Authority is expected to publish its guidelines on this issue later this year. And the European Commission could impose its first fine based on illegal labor restrictions, a decision that would set a powerful precedent for European national regulators.
Despite these developments, few European countries have yet taken on the issue of non-compete provisions in employment contracts. This is despite clear evidence that such restrictions hurt workers by keeping wages low and trapping them in jobs they would prefer to leave. Recent studies in the Netherlands and the UK show that the freedoms of roughly 20% of all employees in these countries are restricted by non-compete provisions.
Even if the U.S. retreats from enforcement of the non-compete ban, it is vital that EU member states and the European Commission press forward with their efforts to liberate workers from these restraints on their freedom to find better jobs, or simply to get away from bad bosses.
This article was featured in The Corner Newsletter: April 25th, 2025
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