The Administrative Council for Economic Defense (Cade) has been analyzing the fine line between legitimate and anticompetitive market intelligence practices, and deepened the discussion on the subject in an investigation initiated on March 17 on the exchange of sensitive information in the area of Human Resources (HR) between healthcare companies.
This is the first time that Cade examines the theme, which has gained prominence on the international stage. In 2016, U.S. antitrust agencies published an antitrust guide for Human Resources professionals (Antitrust Guidance for HR Professionals); in 2018, the antitrust agencies of Japan and Hong Kong released studies that also sought to provide parameters for the activities of Human Resources professionals (Report of the Study Group on Human Resource and Competition Policy And Competition Concerns Regarding Certain Practices in the Employment Marketplace in Relation to Hiring and Terms and Conditions of Employment); and in 2019, the Organization for Economic Cooperation and Development (OECD) published a note on antitrust concerns in labour markets (Competition Concerns in Labour Markets).
According to the General Superintendence of Cade, there would be indications that healthcare companies would have systematically exchanged sensitive information about compensation, pay adjustments and benefits offered to their current and future employees. In addition, they would occasionally have fixed prices and commercial conditions with respect to conditions for hiring labour and HR management.
The agency considered that companies compete with each other for the hiring of employees and thus can be considered rivals in a labour contracting market, even if they do not compete in the manufacture of products or the provision of services.
Based on this premise, the exchange of non-aggregated and non-outdated information relating to current and future intentions, would eliminate uncertainties as to the strategic behavior of competitors, reason why the practice would be a serious infringement that could be analyzed under the per se approach applicable to cartels. This means that in order to establish antitrust liability and impose fines Cade would not be required to verify whether the companies involved enjoyed a dominant position or to assess the anticompetitive effects of the exchange of competitively sensitive information. It would suffice to prove that the practice actually occurred.
The General Superintendence of Cade was clear by pointing out that the antitrust exemption granted to collective labour negotiations conducted through unions due to their social objective (improving working conditions) cannot be viewed as a safe harbour for practices related to the conditions of hiring labour and HR management.
In this sense, the following conducts involving labour issues, when practiced by competing companies, can be considered illegal from an antitrust perspective:
- wage fixing agreements;
- no-poach agreements; and
- exchanges of competitively sensitive HR information.
In view of the fact that the labour market is subject to Cade’s scrutiny, the debate over the antitrust impacts of labour issues is still beginning and a number of questions are yet to be answered. How to calculate the market shares of companies in the labour hire market? What is the level of substitutability between certain jobs and functions ? Does the exchange of information on wage and benefits in markets where professional qualification and investments in intellectual capacity are not relevant factors confer some kind of competitive advantage? Is it possible to speak of "pricing" of work by companies in the face of the concrete effects of collective labour negotiations? These are examples of questions that need to be answered from an interdisciplinary analysis that brings labour law to the antitrust debate.