"Due to the weakening of trade unions and higher levels of market concentration, workers find themselves worse off with fewer potential buyers for their labour. In some cases, companies have very few competitors or have established a monopoly for buying the labour of specific groups of workers. This situation has long avoided scrutiny from the competition authorities, which generally focus on the impact that concentration of market control has on consumers."
So says Haukur Logi Karlsson, a postdoctoral researcher at the Faculty of Law, who is now investigating competition law to discover whether it would be beneficial to expand the law so that it addresses not only consumer interests but also worker interests.
"The research is intended to contribute to the discussion taking place now in both the US and Europe about worsening conditions for workers in our globalised economy, where companies are continually growing larger and concentration of market control is increasing," adds Haukur.
A new tone after the economic collapse in 2008
Haukur explains that with the rise of neoliberalism in US universities in the 60s and 70s, it came to be widely believed that the primary role of competition law is to promote economic efficiency, particularly with regard to consumer interests since the competition authorities at that time often made decisions that were unfavourable to consumers. These arguments gained a lot of traction in US legal practice in the 80s, in line with the Zeitgeist during Ronald Reagan's presidency. The European Union adopted similar focuses in their own competition laws after the turn of the century. "A clause stating that the law was intended to promote healthy economic competition for the benefit of consumers was finally added to the Icelandic Competition Law in 2020," adds Haukur.
After the global economic crash hit in 2008 and doubts about neoliberal ideology began to surface, an increasing number of academics have started to criticise the competition authorities' emphasis on economic efficiency and consumer interests. "These criteria were too narrow, which led to many economic and social harms. These harms could be combated by taking a different approach to the enforcement of rules on competition, in particular with regard to the increased concentration of market control in various markets. One aspect of this discussion involves looking at the circumstances and interests of workers when evaluating a company's behaviour on the market in terms of competition law," says Haukur.
In other words, concentration of market control has an impact on society that goes well beyond the impact on consumers. "For example, it puts a company in a much stronger position as a buyer of the labour of certain groups of workers. A situation like this enables a company to increase profits at its employees' expense, which exacerbates economic inequality between the capital owners and workers who find themselves in a weak position," explains Haukur.
The paradox of increasing market efficiency for the benefit of consumers
There is a certain paradox at play here, according to Haukur. "Consumers could benefit if a company that offers a certain product or service implements poorer conditions for its workers. But those workers are also consumers, and most consumers are also employed somewhere. So, increasing efficiency to benefit consumers at the workers' expense doesn't necessarily have a positive impact on society, even though overall prosperity levels may rise. The biggest risk is increased economic inequality between workers in vulnerable positions and consumers in strong economic positions, especially consumers who also own companies and capital," explains Haukur.
The research is intended to contribute to the discussion taking place now in both the US and Europe about worsening conditions for workers in our globalised economy, where companies are continually growing larger and concentration of market control is increasing.
Interdisciplinary collaboration is central to the research
According to Haukur, the research is about mapping what could be done within competition law to protect workers' interests in the face of companies' increasing control over the labour market. "This mapping will focus in particular on the theoretical foundation for competition law, which is based on both jurisprudential and economic considerations. After completing the mapping process, we will evaluate the advantages of different options and consider ways to implement them by changing the rules or changing the way we apply the current rules," says Haukur, who began this study last autumn and has not yet come to any final conclusions. "It's too early to say whether any specific option would be a good idea, but it is clear at least that there are a number of possible options, which all have pros and cons."
This is not just a legal debate. The research also concerns business administration and economics, so Haukur is working in partnership with Gylfi Magnússon, professor of economics at the University Faculty of Business Administration. "The research is interdisciplinary and Gylfi provides economic insights into competition law, while I cover the legal side," says Haukur. This aligns with the new Strategy for the University, UI26, which places significant emphasis on increasing collaboration between academics in different disciplines.
Haukur's research career has focused on competition law and European law. He completed his PhD in European competition law from the European University Institute in Florence a few years ago. "I usually approach legal subjects from a theoretical perspective, considering theories from the fields of political philosophy, economics and jurisprudence. So there is a strong interdisciplinary theme to my research," he says.
Seeing a clear purpose for your research is vital to morale
Haukur explains that the aim of this research is to make a contribution to the current international debate among scholars over the goals of competition law. "Inequality and concentration of power are classic subjects for people who think about social issues. It will certainly benefit the academic community if this research succeeds in advancing our knowledge of whether we could benefit from changing the way we use competition law in order to tackle social ills related to inequality and concentration of market power," he argues.
The subject of whether competition law could be used to achieve different social goals than those pursued over the last decades is a very exciting and important one. "This research topic also combines everything that makes competition law such a fascinating field to study. Major political debates, economic theory, and the practical reality of the law when it comes to putting ideas into practice. I also believe it's important to choose research topics related to something that really matters in a broader context. Seeing a clear purpose for your research is vital to morale when you're spending long days at your desk in the ivory tower," concludes Haukur.