Competition policy normally focuses on the dangers of big companies exploiting consumers. Thus, the Competition and Markets Authority (CMA) announced last week that it was investigating a proposed Vodafone and Three merger. The firms say this will boost investment; opponents say creating the UK’s largest mobile operator will reduce competition and push up bills. The CMA must decide.
But there’s pressure to broaden competition policy: to make it about protecting workers as well as consumers. After all, if we have little choice about who to work for, the chances of us coming off badly are pretty high. Firms can have what economists call monopsony over workers, just as they can have monopoly over customers. Lower wages, rather than higher prices, are the result.
