The US government takes anticompetitive behavior far more seriously when it occurs in product markets than when it occurs in labor markets. The Horizontal Merger Guidelines, for example, direct the government to review mergers for their product market effects and say nothing about evaluating mergers on the basis of their labor market effects.
The Department of Justice and the Federal Trade Commission have launched countless investigations into product market mischief, and have historically ignored labor market abuse. Only in the last decade has labor monopsony flashed onto the government’s radar screen. In 2010, the DOJ sued a group of high-tech companies that had agreed to refrain from poaching each other’s employees. In 2016, the DOJ and FTC wagged a finger at human resources departments, warning them against no-poaching and wage-fixing agreements. Earlier this year, the DOJ announced its first enforcement action pursuant to this guidance. But while these new efforts are welcome, they are paltry compared to the enormous amount of resources that has been put into antitrust enforcement on the product market side.
This raises a question. Why has the government devoted fewer resources to patrolling labor markets than product markets? One possible answer is that the government should focus on product market competition—either because more harm occurs there, enforcement is more effective there, or both. That is probably the answer that a government official would have given a few years ago if anyone had asked him or her. However, this answer is surely wrong.
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