Ethos of Power in Competition Law Enforcement in Labour Markets

Abstract Monopsony power over the purchase of labour, which is used as a factor in the production of consumer products, will usually not be detected as a harmful concentration within a competition law enforcement paradigm that emphasizes consumer welfare. This problem is integral to the economics-based welfare approach to competition law enforcement. By focusing on specific economic results as a benchmark for enforcement priorities, using partial equilibrium analysis as an analytical method, the enforcement effort risks being blindsided by variables that are not being analysed. Expanding the partial equilibrium analysis to include additional variables, or by attempting a general equilibrium analysis, makes the practical task of competition law enforcement impossibly complicated. In this paper, an alternative approach to rationalize competition law enforcement in the context of labour markets is theorized. Instead of using the currently orthodox welfare-centred approach, an argument for viewing competition law in deontological terms as a means for defusing power is advanced. It is argued that by viewing competition enforcement as a tool for regulating power in the marketplace, a special complementary role could be defined for competition enforcement in labour markets. This approach is inspired by the German ordoliberal project and Galbraith’s concept of countervailing power.