Competition Law and Labour Market Competition in Denmark

1. Introduction

Labour-market competition concerns the competition between employers for workers. Competition law therefore does not operate only on traditional product and service markets; it can also address conduct by employers that reduces employees' ability to move between firms, negotiate remuneration, or obtain competing employment opportunities.

Denmark presents an unusual but important legal framework because Section 3 of the Danish Competition Act expressly excludes “wage and working conditions” from the Act's scope. At the same time, the Danish Competition and Consumer Authority has recognised that agreements between undertakings concerning recruitment, no-poach arrangements and wage fixing can raise competition concerns under EU competition law, particularly Article 101 TFEU where the conduct affects trade between Member States.

The Danish Competition and Consumer Authority participated in the 2024 Joint Nordic Report on competition and labour markets, which specifically examined wage fixing, no-poach agreements, monopsony power and labour mobility.

2. Legal Framework in Denmark

A. Danish Competition Act

The central provisions are:

Section 3 — Wage and working conditions

The Danish Competition Act provides that:

“This Act shall not apply to wage and working conditions.”

The Authority may nevertheless request information from organisations and undertakings concerning wages and working conditions.

This is extremely important. A conventional agreement directly determining employment conditions may therefore fall outside the Danish Competition Act.

However, that does not automatically remove the matter from EU competition law.

B. Section 6 — Restrictive agreements

Section 6 prohibits agreements between undertakings having the object or effect of restricting competition.

Examples include agreements concerning:

• purchase or selling prices;
• trading conditions;
• allocation of markets;
• allocation of sources of supply;
• coordinated competitive behaviour;
• other restrictions of competition. 

In labour markets, the economic equivalent of a purchasing agreement is particularly important.

An employer purchases labour services from workers. Consequently, competing employers coordinating the terms on which they acquire labour can potentially create a buyer-side cartel or monopsony problem.

3. Labour Market as a Relevant Competition Market

A labour market can be analysed as a market in which:

Workers = suppliers of labour

Employers = purchasers of labour

Competition between employers can occur through:

1. salary;
2. bonuses;
3. working hours;
4. flexibility;
5. training;
6. career opportunities;
7. remote-working arrangements;
8. benefits;
9. job security;
10. recruitment opportunities.

Consequently, competition may be harmed even though the immediate contractual relationship is between an employer and an employee.

The Nordic competition authorities have specifically recognised that employer-side market power can produce monopsony power, potentially affecting wages, employment conditions and worker mobility.

4. Wage-Fixing Agreements

A wage-fixing agreement occurs where competing employers agree to:

• pay the same wage;
• cap salaries;
• coordinate salary increases;
• coordinate bonuses;
• limit recruitment offers;
• exchange competitively sensitive remuneration information for the purpose of aligning remuneration.

For example:

Employer A and Employer B agree that neither will offer software engineers more than DKK 700,000 per year.

Economically, this reduces competition between employers for workers.

The Joint Nordic Report treats wage fixing as a serious competition concern and explains that such agreements can increase employer buyer power and negatively affect labour-market allocation.

5. No-Poach Agreements

A no-poach agreement is an agreement under which competing employers agree not to recruit one another's employees.

It may take several forms:

Soft no-poach

“We will not actively approach each other's employees.”

Strong no-poach

“We will not employ each other's employees.”

Mutual recruitment restriction

“Neither company will make employment offers to employees of the other.”

The Danish/Nordic competition authorities identify no-poach arrangements as potentially serious restrictions because they reduce the ability of workers to move between competing employers.

The economic chain is:

No-poach agreement → fewer potential employers → reduced labour mobility → weaker employee bargaining power → potential wage suppression.

6. Monopsony and Employer Market Power

Traditional competition law frequently focuses on monopoly power:

One seller → many buyers.

Labour-market competition requires attention to the reverse:

Many workers → few employers.

This is monopsony power.

A dominant employer may be able to:

• suppress wages;
• impose restrictive employment conditions;
• reduce recruitment;
• discourage employee mobility;
• impose restrictive contractual arrangements.

A particularly important concern arises where a local labour market contains only a few significant employers—for example:

• hospitals;
• universities;
• technology clusters;
• ports;
• specialised manufacturing;
• pharmaceutical companies;
• energy companies;
• public-sector contractors.

The Nordic report expressly discusses monopsony as a labour-market competition concern.

7. Information Exchange Between Employers

Competition problems can arise even without an explicit wage-fixing agreement.

Employers may exchange:

• salary data;
• intended salary increases;
• recruitment plans;
• employee turnover information;
• hiring intentions;
• bonus structures;
• future employment conditions.

If the exchange removes strategic uncertainty between competing employers, it may facilitate coordinated behaviour.

The appropriate assessment depends upon:

• whether the information is public;
• whether it is historic or current;
• aggregation;
• frequency;
• level of detail;
• market concentration;
• purpose of the exchange;
• likely effects.

8. Collective Bargaining and Its Special Position

Denmark has a highly developed collective-bargaining system.

Competition law must therefore distinguish between:

A. Employer-to-employer coordination

For example:

Two competing companies agree not to increase employee wages.

This can raise serious competition concerns.

B. Genuine collective bargaining

For example:

A trade union negotiates employment conditions collectively with an employer association.

EU competition law recognises an important distinction between ordinary commercial agreements between undertakings and genuine collective bargaining concerning workers' employment conditions.

The Nordic report expressly notes that competition-law systems contain exemptions or limitations for collective bargaining arrangements concerning wages and working conditions negotiated by organised social partners.

9. Six Important Case Laws

Because Denmark has a specific statutory exclusion for wages and working conditions, the most useful authorities for Danish labour-market competition frequently come from EU competition law, which applies in Denmark where its conditions are satisfied.

Case 1 — Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie

Case C-67/96

Principle

The Court of Justice recognised that certain collective agreements between employers and employees can fall outside Article 101 TFEU where they pursue legitimate social-policy objectives through collective bargaining.

Importance for Denmark

This is foundational for understanding the relationship between:

• competition law;
• collective bargaining;
• employment conditions;
• trade unions.

It prevents competition law from being applied mechanically to genuine collective bargaining arrangements.

Labour-market lesson

There is an important distinction between:

collective bargaining → potentially protected

and

independent employer coordination → potentially prohibited.

10. Case 2 — Brentjens' Handelsonderneming BV

Joined Cases C-115/97 to C-117/97

Principle

The Court continued the analysis of collective pension arrangements and the relationship between social-policy objectives and competition law.

The case is important because it reinforced the principle that certain collective agreements connected with employment conditions can be treated differently from ordinary commercial agreements.

Danish relevance

The case helps explain why Danish collective bargaining structures cannot simply be characterised as conventional cartels.

11. Case 3 — Drijvende Bokken / Van der Woude

Case C-222/98

Principle

The Court considered collective arrangements concerning supplementary social benefits and their compatibility with EU competition rules.

It emphasised the distinction between an agreement forming an integral part of collective bargaining and ordinary commercial coordination.

Importance

The case demonstrates that the competition-law analysis must examine:

• the nature of the agreement;
• its purpose;
• the collective-bargaining context;
• the relationship with employment conditions.

This is particularly relevant to Denmark's collective-bargaining model.

12. Case 4 — FNV Kunsten Informatie en Media v Staat der Nederlanden

Case C-413/13

Principle

This is particularly important for modern labour markets.

The Court considered collective bargaining involving self-employed workers.

It recognised that certain self-employed persons can be economically comparable to workers, and collective agreements concerning their working conditions may receive special treatment.

Importance for Denmark

The modern labour market contains:

• freelancers;
• platform workers;
• independent contractors;
• consultants;
• gig workers.

The case therefore helps determine when collective negotiations involving persons formally described as self-employed may still fall within the social-policy sphere.

13. Case 5 — European Super League / European Superleague Company

Case C-680/20

The Court's competition-law reasoning concerning sporting rules is relevant where sports organisations regulate economic activity.

The broader principle is that rules adopted by sporting bodies can fall within EU competition law where they regulate economic activity, although legitimate sporting objectives may be relevant to the analysis.

Labour-market relevance

Professional sport contains a distinct labour market:

players ↔ clubs

Rules concerning:

• recruitment;
• transfers;
• player registration;
• mobility;
• contractual restrictions

can therefore affect competition between employers for labour.

14. Case 6 — FIFA v BZ

Case C-650/22, judgment of 4 October 2024

This is one of the most significant modern authorities for labour-market competition.

The case concerned rules affecting professional football players' employment mobility.

The Court examined the competitive significance of restrictions affecting the ability of clubs to recruit players.

The decision is important because it demonstrates that restrictions on labour mobility can constitute competition-law problems where they affect an economic market.

The Nordic competition authorities' report expressly refers to the FIFA case when discussing no-poach arrangements and labour-market competition.

Danish relevance

The reasoning can be relevant to Danish professional sports and other specialised labour markets where contractual or organisational arrangements restrict recruitment between competing employers.

15. Case 7 — Liga Portuguesa de Futebol Profissional

Case C-133/24, judgment of 30 April 2026

This is a particularly recent and directly relevant EU authority.

The case concerned an agreement between professional football clubs under which clubs agreed not to recruit certain players following unilateral termination of employment contracts during the COVID-19 period.

The Court characterised the arrangement as equivalent to a no-poach agreement and examined its effect on competition in the recruitment market for players.

The Court explained that no-poach agreements can resemble horizontal agreements allocating sources of supply because they artificially divide workers between participating undertakings.

Importance for Denmark

This is highly relevant to Danish competition analysis because Denmark applies EU competition law where the requirements of Article 101 TFEU are satisfied.

It also demonstrates that:

Competition in recruitment itself can constitute a competitive parameter.

16. Case 8 — Meca-Medina and Majcen v Commission

Case C-519/04 P

Principle

The Court confirmed that sporting rules can fall within EU competition law when the underlying activity is economic.

At the same time, restrictions may need to be assessed in their proper context, including whether they are inherent in legitimate objectives and proportionate to those objectives.

Labour-market significance

The case is useful for analysing employment restrictions in:

• professional sports;
• licensing;
• athlete eligibility;
• player recruitment;
• sporting labour markets.

17. The Modern Danish Approach to No-Poach Agreements

The 2024 Nordic report is especially significant for Denmark.

It identifies two principal categories:

Wage fixing

Competitors coordinate remuneration.

No-poach

Competitors coordinate recruitment.

The report explains that these arrangements can reduce competition because employers cease competing fully for labour.

The European Commission has similarly stated that wage-fixing and no-poach agreements will in many cases constitute restrictions by object under Article 101 TFEU, although the precise assessment remains case-specific.

18. Non-Solicitation Clauses

A particularly difficult issue is the distinction between:

Legitimate commercial protection

For example, a narrowly drafted restriction connected to the sale of a business or establishment of a joint venture.

and:

Independent labour-market restriction

For example:

“Company A and Company B agree that they will never recruit employees from one another.”

The Danish Competition and Consumer Authority has recognised that inter-company non-compete clauses may sometimes constitute ancillary restraints when directly connected and necessary to a legitimate transaction, such as a lawful merger or joint venture.

Therefore, context is critical.

19. Labour-Market Effects of Competition Restrictions

Anti-competitive labour arrangements may produce several effects.

1. Lower wages

Reduced employer competition may weaken workers' bargaining position.

2. Reduced labour mobility

Workers may have fewer alternative employers.

3. Reduced innovation

Companies may compete less aggressively for highly skilled employees.

4. Lower recruitment

Employers may stop searching for employees employed by rival companies.

5. Reduced productivity

Workers may remain in positions where their skills are less efficiently deployed.

6. Geographic effects

The problem may be particularly important in local or specialised labour markets.

7. Reduced bargaining power

Workers have less ability to obtain competing offers.

The Nordic report specifically identifies these potential effects of no-poach and wage-fixing arrangements.

20. Labour Market Concentration

Competition authorities can examine concentration on the employer side.

Important indicators include:

• number of employers;
• employer market shares;
• concentration ratios;
• HHI;
• worker mobility;
• geographic boundaries;
• occupational specialisation;
• entry of new employers;
• switching costs;
• non-compete obligations;
• recruitment restrictions.

A market with thousands of workers but only two or three realistic employers may still present significant competitive concerns.

21. Merger Control and Labour Markets

A merger between two major employers can produce both:

Product-market effects

The merged firm may have greater power over customers.

Labour-market effects

The merged firm may become a much larger purchaser of labour.

For example:

Employer A + Employer B = 70% of employment opportunities for a specialised occupation in a particular Danish region.

Even if the product-market effects appear limited, the transaction may raise questions about competition for labour.

This is increasingly relevant to modern merger analysis because competition can operate on both:

• the output side; and
• the input side.

22. Digital Labour Markets

Digital platforms create additional competition concerns.

Examples include:

• food-delivery platforms;
• ride-hailing platforms;
• freelancer platforms;
• online recruitment platforms;
• professional networking platforms;
• digital staffing agencies.

Potential concerns include:

• algorithmic wage coordination;
• automated worker allocation;
• platform exclusivity;
• restrictions on multi-homing;
• data-based discrimination;
• sharing of worker information;
• algorithmic recruitment coordination.

The European Commission has identified labour-market agreements as an increasing area of antitrust attention and notes that national competition authorities are likely to handle many labour-market cases because labour markets are frequently national, regional or local.

23. Worker Data and Competition

Employer coordination involving worker data can also raise competition concerns.

Examples:

• salary databases;
• employee-performance databases;
• recruitment databases;
• information about employees considering leaving;
• future hiring plans;
• compensation benchmarks.

A particularly sensitive situation arises where competing employers obtain sufficiently detailed and current information to coordinate their future remuneration or recruitment behaviour.

24. Relationship Between Danish and EU Law

A key examination point is:

Danish domestic law

Section 3 expressly excludes wage and working conditions from the Danish Competition Act.

EU law

Where conduct may affect trade between EU Member States, Article 101 or 102 TFEU may apply independently or alongside Danish competition provisions. The Danish Competition Act expressly recognises this parallel application.

Therefore:

Section 3 Danish Competition Act ≠ complete immunity from EU competition law.

This distinction is essential.

25. Practical Legal Test

For a suspected labour-market agreement in Denmark, the following sequence is useful:

Step 1 — Identify the actors

Are they:

• employers;
• undertakings;
• trade unions;
• employer associations;
• self-employed workers;
• public bodies?

↓

Step 2 — Identify the labour-market restriction

Is it:

• wage fixing?
• no-poach?
• non-solicitation?
• information exchange?
• recruitment allocation?
• exclusivity?
• employee allocation?

↓

Step 3 — Consider Section 3

Does the conduct concern wage or working conditions falling outside the Danish Competition Act?

↓

Step 4 — Examine Article 101 TFEU

Could the conduct affect trade between EU Member States?

↓

Step 5 — Determine restriction by object/effect

Is the arrangement inherently harmful to competition, or must actual effects be established?

↓

Step 6 — Examine collective bargaining

Is it genuinely part of collective negotiations concerning employment conditions?

↓

Step 7 — Examine ancillary restraints

Is the restriction directly connected with and necessary for a legitimate transaction such as a merger or joint venture?

↓

Step 8 — Consider Article 101(3)

Could measurable efficiencies satisfy the four cumulative exemption conditions?

↓

Step 9 — Consider dominance

Does an employer possess substantial buyer power that could potentially amount to abuse of dominance under Article 102 TFEU/Section 11?

26. Important Distinction: Collective Bargaining vs Employer Cartel

27. Key Case-Law Principles — Consolidated

The most recent EU case law is particularly significant because the Court's 2026 reasoning expressly treats a no-poach agreement as coordination affecting the market for recruitment of workers.

28. Conclusion

Competition law and labour-market competition in Denmark occupy a dual legal framework.

On the one hand, Section 3 of the Danish Competition Act excludes wages and working conditions from the Act, reflecting the special position of Denmark's collective-bargaining model.

On the other hand, employer conduct can still engage EU competition law, particularly Article 101 TFEU, where competing undertakings coordinate recruitment, remuneration or other competitive parameters and the EU-law jurisdictional conditions are satisfied.

The principal modern concerns are:

1. wage fixing;
2. no-poach agreements;
3. non-solicitation arrangements;
4. employer information exchanges;
5. labour-market concentration and monopsony;
6. restrictions on worker mobility;
7. digital-platform labour coordination; and
8. labour-market effects of mergers.