Employers take note: CMA imposes first ever fines for anti-competitive employment practices

Overview

In a recent landmark decision, the UK Competition and Markets Authority ("CMA") imposed a fine on sports broadcasting companies for fixing wages paid to freelancers. It is the first time that the CMA has issued a competition law infringement decision in relation to labour market restrictions. It sends a clear message to the UK business community that the CMA treats wage-fixing with the same severity as traditional forms of hardcore cartel conduct, such as price-fixing, market-sharing and bid-rigging. 

Given the political imperative to promote economic growth and productivity to address the cost-of-living crisis, well-functioning labour markets are an increasing priority, with competition authorities keen to play their part. This alert considers the CMA's unprecedented decision and sets this in the context of wider enforcement action against labour market restrictions being witnessed across Europe.

Case background and key findings

On 17 April 2025, the CMA published its first antitrust infringement decision in relation to anti-competitive behaviour in UK labour markets ("Decision"). This found that a total of 15 infringements had been committed by the BBC, BT, IMG, ITV and Sky (together, the "Parties") over more than seven years, with the CMA imposing fines together exceeding £4.2m.

Each infringement concerned bilateral exchanges of competitively sensitive information between the Parties in respect of rates of pay for freelance workers involved in the production and broadcasting of sports content. The Parties unlawfully shared information on freelancers' pay, including future wage increases.

• The Decision proceeds on the basis that collusion in respect of wage-setting constitutes an infringement of the competition rules "by object". It is therefore ranked among the most egregious forms of anti-competitive conduct, such as hardcore price-fixing, bid-rigging or market-sharing.
• Although there was not necessarily a formal agreement amongst the Parties, the CMA found that they had acted unlawfully by engaging in the exchange of competitively sensitive information in respect of payment rates to freelance staff. This reduced competition by eliminating the normal uncertainties that would otherwise exist in a fully competitive labour market.
• The CMA's approach to illegal information-sharing in an employment context is in line with its general guidance on information exchange. That guidance emphasises that where one party receives competitively sensitive information from another, it is presumed to have taken account of that information when determining its own conduct on the market. This remains the case even if relevant information is obtained indirectly or could be gathered from publicly available sources, as in this case. So, for example, the CMA noted that Sky had, in March 2014, informed a number of 'outside broadcast' service providers of its future pay-rate increase. This same information was then relayed by Sky directly to ITV. While ITV could have obtained this information via outside broadcast service providers, the CMA held that the direct provision of this same information by Sky to ITV contravened competition law. ITV increased its own rates of pay only after Sky had confirmed its intentions to ITV. The CMA found that, for its part, Sky disclosed pay rate information so that ITV would not raise its rates higher than those of Sky.
• The CMA commenced its formal investigation in 2022 by launching its first ever unannounced "dawn raid" inspections into suspected labour market restrictions. This underscores the gravity with which the CMA treats such conduct and its determination to actively intervene to eliminate such restrictions. In the Decision, the CMA relies extensively on witness interviews and internal documents, particularly digital evidence – WhatsApp and email messages.
• The Decision notes that, in many instances, the Parties claimed to exchange competitively sensitive information for the purpose of benchmarking (to understand standard industry pay rates) or to avoid a "bidding war" for freelance talent. The CMA found that neither of these motives detracted from the illegal objective, and "ignorance or a mistake of law does not prevent a finding of intentional infringement." This should serve as a stark warning: businesses cannot plead ignorance of the law as an excuse, even when it extends into new and novel areas such as labour market restrictions.
• In terms of procedure, the case was triggered by a leniency application made by Sky in May 2021. As such, even though Sky participated in 10 of the 15 infringements, it received full immunity from any penalty. BT, IMG and ITV were later granted leniency. All Parties agreed to settle the case with the CMA. This resulted in procedural efficiencies and, with the Parties having waived their ability to appeal the Decision, a binding precedent has now been set. However, this is far from the end of the story. In the press release announcing the Decision, the CMA noted that it was soon to issue further guidance to help companies ensure that their employment practices comply with competition law.

Wider context

The Decision fits into a wider trend of increased interest by competition authorities across Europe into anti-competitive behaviour in labour markets.

UK

In the UK, the CMA has, in recent years, increasingly prioritised scrutiny of labour market practices and has intervened dramatically where it has suspected wrongdoing.

In 2023, the CMA published brief guidance advising employers how to avoid anti-competitive behaviour. In 2024, the CMA's Microeconomic Unit published its very first major research report addressing labour market concentration, employer market power and worker outcomes. In an accompanying press statement, Sarah Cardell, Chief Executive of the CMA, warned the UK business community of the CMA's resolve to more actively investigate labour markets ("we have the power to take enforcement action against firms which break the law by fixing wages, just as we can act against firms that collude to fix prices"). True to its word, in the very same month the CMA extended its investigation into suspected anti-competitive behaviour in the supply of fragrances and fragrance ingredients to include "reciprocal arrangements relating to the hiring or recruitment of certain staff."

As recently as April 2025, in a consultation on wide-ranging reforms to its long-standing cartel leniency guidance, the CMA proposed that no-poach arrangements should be expressly included as an example of the hardcore cartel activities that infringe competition law. Enforcement against labour market restrictions remains high on the CMA's policy agenda.

EU

In recent years, competition in labour markets has increasingly been scrutinised at both the national level and by the European Commission ("Commission") and has been subject to rigorous intervention. 

Many national competition authorities across Europe are actively reviewing labour market practices. Wage-fixing and no-poach agreements have been investigated by authorities in Member States including Finland, France, Germany, the Netherlands, Portugal, Poland and Spain.  For example, in July 2024 the Belgian Competition Authority fined three private security companies €47m for bid-rigging, no-poach agreements and wage-fixing.

The focus of EU antitrust activity has tended to be on wage-fixing and no-poach agreements, both of which are characteristically treated as object restrictions of competition. Indeed in its 2024 Policy Brief specifically addressing antitrust in labour markets, the Commission emphasised the seriousness of restrictions in labour markets and warned that "enforcement against restrictive labour market agreements has become a priority for many competition authorities worldwide".

There is also a growing body of case-law from Europe's highest courts, particularly in the sports context, ruling against restrictions in employment contracts. As recently as 15 May 2025, Advocate General Emiliou delivered an Opinion to the Court of Justice of the European Union ("CJEU") advising that no-poach arrangements should generally be found to constitute a hardcore restriction of competition. Considering an arrangement between Portuguese football clubs to abstain from competing to recruit players during the COVID-19 pandemic, the Advocate General suggested that in these "exceptional circumstances" it was possible that some forms of restriction might be justified and permissible to the extent necessary to preserve the fairness and integrity of the sport during the pandemic.  The judgment of the CJEU on this controversial topic is eagerly awaited and will likely provide key guidance on the future treatment of no-poach arrangements under EU law.

Key Takeaways

The CMA's infringement decision and fines send out a clear message to businesses to make sure that their strategies for recruiting and paying staff comply with competition law.

1. HR departments should be trained in competition compliance, not just senior management and front-line business staff. While the Decision expressly addresses wage-fixing, collusion in relation to other remuneration terms and employee benefits could raise comparable legal risks, while no-poach arrangements are being targeted by competition authorities in the UK and across the EU.
2. Caution needs to be exercised by HR personnel to the extent that they are engaging in any industry or trade association benchmarking schemes in respect of wages, bonuses or other employee benefits.  Bilateral or multilateral engagement with peer firms to seek such information is fraught with risk and it is imperative that appropriate safeguards are observed (if such contacts are deemed permissible).
3. Wage-fixing among employers, and exchanges of related information, is a serious breach of competition law. The CMA will not tolerate such conduct, even if purportedly for 'legitimate' benchmarking purposes or if the information may be publicly available.  The Commission has similarly emphasised that public exchanges of competitively sensitive information can be problematic.
4. Rigorous action on employment practices is likely to remain high on the CMA's agenda. In its Annual Plan for 2025/26, the CMA highlights its action in relation to UK labour markets and emphasises the importance to the UK economy of continued enforcement to keep these markets "open, competitive, and dynamic." As such, labour market enforcement is aligned with the CMA's 'pro-growth' agenda.
5. Dawn raids remain a key investigative tool for the CMA, with its powers in this area bolstered by the entry into effect on 1 January 2025 of the Digital Markets, Competition and Consumers Act 2024 ("DMCCA"). Digital evidence is a primary focus, with the CMA's powers to search for and seize such evidence now strengthened under the DMCCA to include, for example, data stored remotely on the cloud and contained in ephemeral messages. However, the continuing relevance of interviews with staff is evident from the Decision. In this regard, it is important to recognise that that the CMA's interview powers have also been enhanced substantially by the DMCCA .

The Antitrust team at Mayer Brown can assist with all aspects of competition inspections and resulting liaison with competition authorities around the world.