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America’s working people and their elected representatives in the labor movement have been an untapped resource for antitrust enforcers. That should change. Not only are workers an underutilized source of information about the likely effects of a merger, but their labor organizations also offer an effective counter to employer power.

As signaled with the Executive Order on Promoting Competition issued in July 2021, the Biden administration has adopted a new approach to competition policy. The agencies have rhetorically defenestrated the previously hegemonic consumer-welfare standard, which held that low consumer prices and high output are the sole and sacrosanct goals of antitrust, to the exclusion of other aims set out by Congress, such as regulating competition to protect democracy and to preserve economic liberty. Consistent with the agencies’ charge from Congress, the Executive Order includes the protection of workers from employers’ power and unfair practices—economic liberty includes the freedom from exploitation.

Moreover, the agencies have welcomed the broader public into the heretofore esoteric and rarified domain of antitrust, where arid theories have long taken precedence over effects of corporate practices on human beings. For example, the Federal Trade Commission (FTC) now holds regular meetings that are open to the public, and the Department of Justice (DOJ) and FTC have solicited public comments on antitrust and competition regulations and policy documents from groups well outside the usual suspects in academia and the antitrust bar.

We’d like to focus here on one group in particular that has embraced the invitation to join the antitrust discussion: the labor movement. As it turns out, working people and their elected representatives in labor unions have a lot to say about competition policy. And as an antitrust economist and lawyer, we believe our community should listen carefully. In their public comments on the draft Merger Guidelines, labor unions have articulated a holistic approach to monopoly power that moves beyond the narrow recent obsession with consumer welfare and returns to the aims of Congress. For example, as the Service Employees International Union (SEIU) wrote in its comments, “[e]conomic concentration enables political concentration, which in turn corrodes democracy.” This echoes the concerns of the authors of the antitrust laws: the Supreme Court once described the Sherman Act as “a comprehensive charter of economic liberty.”

We’d like to highlight three themes emerging from the comments submitted by labor unions that speak powerfully to break with antitrust law’s recent friendliness to big business and return to the meaning of the statutes enacted by Congress. First, unions emphasize the need to treat workers and their unions as the expert market participants they are, with an immense store of untapped knowledge and experience to offer agencies throughout the merger review process. For example, SEIU’s comment contained several examples of harms from market power and mergers spoken directly by healthcare workers, who called on the agencies to include workers and representatives when they conduct merger reviews. While the antitrust agencies have sometimes informally consulted workers during merger reviews, unions have asked that this engagement be deepened and formalized. The Communication Workers of America (CWA) thus applauded the agencies for “mak[ing] explicit what has been an occasional, informal practice of consulting with labor unions,” pointing out that “workers’ deep knowledge of their industry is an invaluable input into the review process.”

Indeed, they are: Workers are deeply informed and have a unique perspective, not only on labor market matters, but on product markets and industry conditions as well. Workers are most likely to know “where the bodies are buried” in any given transaction, and thus represent a previously untapped source of rich qualitative and quantitative information on industrial and market conditions. They should be brought into the merger process and given a central role in a process long dominated by lawyers and economists with little relevant industry knowledge.

Second, comments from labor unions stressed the necessity of returning to the statutes by embracing strong structural presumptions against mergers tied to market share. CWA called for the use of market share tests instead of the “judicial fortune telling” that has prevailed for decades. The Strategic Organizing Center (SOC), a coalition of several labor unions including CWA and the SEIU, encouraged the agencies to lower the structural presumptions in the final guidelines. As part of this, they emphasized the need for the agencies to not weigh purported benefits to consumers as offsetting harms to workers—especially the practice of treating harms to workers as cost-saving “efficiencies” that putatively justify mergers that may lessen competition.

For example, SEIU noted that HCA, a major hospital chain, typically lowered staffing levels after acquiring a hospital. SEIU argued, correctly in our view, that while layoffs and lower staffing levels in healthcare may boost profitability, they should not be considered a benefit from mergers. CWA, for its part, called for a return to the plain language of the statute and controlling Supreme Court case law, which proscribe balancing out-of-market benefits against harms to other market participants, such as workers, in a relevant antitrust market. Meanwhile the AFL-CIO, the major labor federation in the United States, commented that proposed merger “efficiencies” have sometimes included layoffs that “fatten the bottom line” at the expense of workers and product quality. Urging the two agencies to go further than they did in the draft Merger Guidelines, the labor federation, relying on binding Supreme Court precedent, called on the DOJ and the FTC to explicitly reject an efficiencies defense for presumptively illegal mergers.

Third, labor comments importantly reminded the antitrust agencies of the inherent power imbalance in the employer-employee relationship. Given the unequal distribution of property and the necessity for most people to either work or starve, the 19th century labor republican George McNeill wrote workers “assent but they do not consent, they submit but they do not agree.” In addition to the monopsony power stemming from employer concentration, the challenges of finding new work, and workers’ preferences for certain types of work and work environments highlighted by antitrust economists, virtually all workers are subject to employer power, embodied by take-it-or-leave-it employment terms and at-will employment.

Employer power is the rule in labor markets, not the exception. Labor, employment, and antitrust law have long recognized this basic fact, creating legal protections for workers, including the antitrust exemption for collective action, and providing the formal structure of collective bargaining to counteract employers’ wage-setting power.

And yet, as the AFL-CIO’s comments pointed out, “unions, collective bargaining and collective bargaining agreements are not explicitly mentioned” in the draft Merger Guidelines. This is an important oversight because, as the AFL-CIO points out, “unions and collective bargaining can provide a counterbalance to the effects of a merger on workers.” CWA went further, arguing that this omission risked continuing the “misguided trend of interpreting the employment relationship as based in individual contract, rather than being structured by labor market institutions.” The SOC urged the agencies to “to recognize collective bargaining as a structural remedy to concentrated corporate power.” Collectively bargained wages are no longer unilaterally set by employers but negotiated under threat of strike or alternative means like arbitration. Thus, unions and collective bargaining are an available remedy to employer monopsony power in labor markets. (While more likely to litigate troubling consolidations than they were in the past, the antitrust agencies continue to accept remedies in merger cases.) The positive effect of collective bargaining likely extends beyond the workers directly covered by the agreement: there is evidence of spillovers from collectively bargained wages to workers not covered by the agreement.

One area of policy disagreement: some of the labor comments encouraged the agencies to rely on certain practices as indicators of “market power.” These include the use of particular contractual restraints on workers and misclassifying employees as independent contractors. We agree that these practices are harmful, but believe that they are best addressed, not by implicitly tolerating such conduct and incorporating them into merger review, but by agency action to directly prohibit them. In particular, the FTC, with its expansive statutory authorities, should directly restrict these practices. For instance, the FTC should challenge the misclassification of workers as an “unfair method of competition.” As we have written elsewhere, we believe antitrust regulators can help workers most by challenging unfair business practices and models.

Brian Callaci is Chief Economist at Open Markets Institute. Sandeep Vaheesan is Legal Director at Open Markets Institute.