Competing for talent: New guidance on avoiding anti-competitive behaviour for employers

Recently the Competition and Markets Authority (CMA) published new guidance (the CMA Guidance) to help those involved in recruiting and retaining workers understand how competition law applies to their work.

The Competition Act 1998 prohibits anti-competitive agreements (whether oral or written) between businesses. The CMA Guidance is relevant to all those involved in the recruitment and retention of workers, such as HR professionals, recruiters, and employers, and sets out the risks and responsibilities when engaging with other businesses about terms and conditions of employment in the labour market.

The CMA’s focus is on ensuring fair competition for talent, which can affect pay, employee mobility, and business growth.

Myths debunked

There is a common misconception that competition law does not apply to agreements between employers about wages or working conditions, and that these are solely HR matters. The CMA Guidance makes clear that this is not the case. Competition law applies when businesses agree or coordinate on matters such as salaries or benefits packages.

Businesses may compete to hire or retain workers, even if they do not compete for customers. For example, a manufacturing company and a software company may not compete for customers, but if both seek to hire software engineers, they are competitors in the labour market. Agreements or arrangements not to hire each other’s engineers or to cap pay could breach competition law.

What is prohibited?

The CMA Guidance identifies three main types of anti-competitive behaviour that can arise when recruiting or retaining staff:

No-poaching agreements

These are agreements between two or more businesses not to approach or hire each other’s employees (or not to do so without the other employer’s consent). From a competition perspective, the theory of harm is that no-poaching agreements reduce competition and mobility in the labour market, which can lead to lower pay and poorer working conditions.

Although there has not been any specific or public enforcement by the CMA in this area to date, in the US, the first no-poach lawsuit dates back to 2010, when the Department of Justice Antitrust Division filed a complaint against six tech companies based in Silicon Valley. The companies had entered into bilateral agreements not to recruit each other’s employees by approaching them either in person, by phone, letter, or email. The Department of Justice subsequently launched further investigations into no-poaching agreements between companies in other sectors.

Whilst it remains to be seen whether the CMA will turn its attention to no-poaching agreements, its latest guidance suggests it may take a similarly hard-line approach to that adopted by the US Department of Justice.

Wage-fixing agreements

These are agreements between two or more businesses to fix employees’ pay or other employee benefits. They include agreeing the same wage rates or setting maximum caps on pay.

Whilst the CMA’s guidance on this point is limited, its view is that market forces should determine pay rates, and any attempts by groups of employers to distort this is likely to cause suspicion. The CMA’s August 2023 guidance on horizontal agreements lists wage-fixing as a type of agreement that restricts competition by object; the most pernicious type of anti-competitive agreement.

This is the kind of alleged agreement that the CMA is currently investigating. In the sports broadcasting investigation, the CMA alleges that several large sports broadcasters collectively agreed to pay a fixed amount to freelance cameramen, which it believes restricted the ability of those freelance workers to compete for higher pay.

Exchange of competitively sensitive information

Sharing information that reduces uncertainty in the market or could influence the competitive strategy of other businesses, such as future pay intentions or current salary data, can breach competition law. Even unilateral disclosures of such information can be problematic. The recipient is generally presumed to have taken the information into account unless they publicly distance themselves or report the contact to the authorities. Practical examples in the CMA Guidance of information exchanges that are likely to be problematic include:

HR professionals from competing companies sharing information about the status of pay negotiations and/or pay rates in the pub;
HR professionals sharing information about pay rates for freelancers;
‘benchmarking’ exercises involving only a small number of employers, such that those employers can easily identify what the others are offering in terms of pay and benefits; or
companies agreeing to limit salary increases and/or to align pay rates with each other

The CMA Guidance also sets out some examples of when exchanging information between competitors is less likely to be problematic. These include where an HR consultancy provides a benchmarking reports using a large number of employers such that no individual employer can be identified, or where benchmarking is carried based on publicly available information.

Lessons from recent CMA enforcement actions

The CMA Guidance includes real-world examples to illustrate how competition law can be enforced in practice:

Sports broadcasting: The CMA investigated five businesses involved in the production and broadcasting of sports content and imposed fines on four of them totalling over £4 million after finding 15 instances where companies unlawfully shared sensitive information about freelancer pay rates, including day rates and pay rises, with the aim of coordinating payments.
RBS: Individuals at RBS disclosed confidential and commercially sensitive future pricing information to their counterparts at Barclays through informal contacts. RBS was fined almost £30 million, while Barclays avoided a fine by reporting the conduct under the leniency policy.

In addition, the CMA is currently investigating suspected anti-competitive conduct in the fragrance and fragrance ingredients market under the Competition Act 1998. One of the issues the CMA is considering in that case is whether the parties entered into reciprocal arrangements relating to the hiring or recruitment of staff involved in fragrance and fragrance ingredient supply. The investigation is coordinated with the European Commission, US Department of Justice, and Swiss Competition Commission, with updates expected in March 2026.

The above cases demonstrate that both formal and informal exchanges of sensitive information, whether about pay or pricing, can result in significant penalties. Employers should be aware that competition law applies not only to written agreements but also to verbal understandings and informal discussions, including those that occur in social or industry settings. The CMA’s leniency policy provides an incentive for organisations to report anti-competitive conduct, potentially reducing liability if they act promptly.

What about collective bargaining?

The CMA Guidance confirms that genuine collective bargaining between employers and workers’ representatives, such as trade unions, is not caught by competition law, whether workers are employed or self-employed.

However, when preparing for collective bargaining, employers should not exchange competitively sensitive information among themselves unless it is necessary and only if the purpose cannot be achieved by other means, such as using an independent party to aggregate and anonymise the data.

Practical steps for employers to ensure compliance

Employers can reduce the risk of breaching competition law in labour markets by:

Raising awareness: Ensure that all staff involved in recruitment and HR understand how competition law applies to their activities, including the risks of informal discussions with other businesses.
Reviewing practices: Regularly check recruitment and pay processes to confirm there are no arrangements with other organisations that restrict hiring or set pay rates.
Avoiding sensitive discussions: Do not discuss or share information about pay, future salary intentions, or recruitment strategies with competitors, whether formally, informally, or through third parties.
Training teams: Provide targeted training for HR and recruitment staff so they can recognise and respond appropriately to situations where competition law may be relevant.
Establishing reporting channels: Make sure staff know how to raise concerns about potential breaches and that there are clear procedures for reporting and addressing issues.
Monitoring compliance: Periodically review internal policies and documentation to ensure ongoing compliance and to address any gaps or risks.

What are the consequences of breaching competition law?

There can be significant consequences for breaching competition law. Businesses can be fined up to 10% of their annual worldwide turnover, ordered to change their behaviour, prevented from bidding for public contracts, and exposed to private damages actions. Individuals who engage in cartel activity can be prosecuted and sentenced to up to five years in prison and/or a fine. Directors of companies that have breached competition law can be disqualified from managing a company for up to 15 years.

If you would like to discuss any of the issues above, or if you would like advice on your recruitment process and workplace policies, please get in touch with one of our experts.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2025. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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