Collective Bargaining for Gig-workers
EU competition law as an obstacle to the completion of the social market economy
Solène Festor de Suremain 11312076
University of Amsterdam
Abstract
LLM. International and European Law Competition Law and Regulation Track LL.M. Thesis
Supervisor: Dr. Katalin Cseres 24-07-2020
As the platform economy has re-written the way of consuming and living, it has significantly re-written the way of working. The structural differences in the platform labour market compared to the traditional labour market has led to inflating the share of employed individuals, qualified as gig-workers. Gig-workers, who are considered self-employed, suffer from strong social inequalities and weak bargaining power against platforms. Albeit the competitive benefits of the platform economy, the EU is facing the significant threat of a social race to the bottom. Labour lawyers deplore the lack of labour protection afforded to these self-employed because of that exact legal status and the economic power of platforms. The traditional remedy to correct weak positions in the labour market is resorting to the fundamental right of collective bargaining. However, under the competition law framework, self-employed are considered undertakings. A collective union agreement between gig-workers would thus be a violation of the cartel rules, barring the possibility altogether for gig-workers to self-regulate. This paper explores and reconciles the tension between the competition and labour law frameworks in the context of the EU’s social market economy by analysing both frameworks. In the labour law framework, socioeconomic benefits can be uncovered under the multifaceted nature of the right to collectively bargain. This paper posits that competition law should not ignore this evidence. Against this background, revisiting the current standards of the competition framework, and replacing it within the broader Treaty framework can help create a normative framework in which gig-workers could unionize without breaching cartel rules.
Table of Contents
1. Introduction ... 3
2. The platform economy and labour law ... 5
2.1 Characteristics of the platform labour market and the gig-workers ... 5
2.2 Labour law framework and foundations ... 8
2.3 Monopsony failure in the gig-labour market ... 9
3. Collective bargaining: a multifaceted right ... 10
3.1 A fundamental, democratic and social right ... 11
3.2 An economic freedom ... 13
4. Collective bargaining in the social market economy; the Ordoliberal reading... 14
4.1 The Ordoliberal and competition law nexus ... 15
5. Collective bargaining agreements in competition law ... 16
5.1 Rationale for exempting collective agreements from Article 101(1) ... 17
5.1.1 Exemption for workers... 17
5.1.2 Exemption for self-employed? ... 19
5.1.3 Remarks ... 23
5.2 Two scenarios for gig-workers and collective agreements ... 23
5.2.1 First scenario – The Wouters Doctrine ... 23
5.2.2 Second scenario – Article 101(3) exception ... 25
5.3 Interim Conclusion ... 31
6. Remarks and Conclusions; Rethinking competition law for the gig-labour market ... 32
6.1 A possible convergence between free movement and competition rules? ... 32
6.2 Conclusions ... 33
1. Introduction
The fourth industrial revolution we live in, brought to us by technological advancements, created the economy.” The collaborative economy or the so called “gig-economy” brings consumers and businesses significant efficiencies and rapidity in doing business. Both end consumers and undertakings strongly value the opportunities on the rise for increased competitiveness in the Digital Single Market induced by new business models.1 Among all the new developments, the gig-economy is significantly changing traditional employment relationships, induced by more and more demand from businesses for a flexible and on-demand workforce. For instance, in the US, 95% of employment’s net growth occurred in alternative work between 2005 and 2015.2 Europe’ situation is also rapidly evolving, and workers of the gig-economy represent a significant group of our society.3 This poses fundamental questions on how labour and competition policymakers should regulate the collaborative economy phenomenon and the metamorphosis of its labour market, now composed of more and more self-employed gig-workers.
A major risk of the gig economy is the lack of employment security induced by platform employers’ new form of employment: the so-called non-standard employment contracts.4 These contracts offer flexibility and the possibility for gig-workers to undertake several activities in the job market. However, an increasing share of the gig-economy’s workers performing shifts via platforms like Uber or Deliveroo are in precarity. Albeit being scarce, some data on the remuneration of gig-workers compellingly attest for this precarity. For instance, salary equilibriums are lower than traditional offline work, because competition in the gig-labour force is not driven by skills but by the share of labour who could perform the service.5 Because the gig-labour market is driven by a few powerful actors, the platforms, gig-workers cannot simply turn to other (barely inexistent) more competitive businesses.
Some significant risks arise from this new form of employment, related to the fundamental right of collective bargaining: the right of association in the workplace. These collective bargaining rights are often hard to access in the online environment. However, a growing share of gig-workers demands effective access to collective bargaining, as it represents
1 Commission, ‘A European agenda for the collaborative economy’ (Communication) COM (2016) 356 final 2 Elein Pofeldt, ‘Are We Ready For A Workforce That is 50% Freelance?’ (2017) Forbes
3 Commission (n 1)
4 Valerio De Stefano, ‘The Rise of the “Just-in-Time Workforce”: On-Demand Work, Crowd Work and Labour
Protection in the “Gig-Economy”’ (2015) 37 Comp. Labour L & Pol'y
5 Willem Pieter De Groen and Ilaria Maselli, ‘The Impact of the Collaborative Economy
the traditional and most effective way to remedy poor working conditions.6 As enshrined in the Treaty on the Functioning of the European Union (The TFEU) and the European Charter of Fundamental Rights, collective bargaining is recognized as a necessity for social dialogue at Union level and as a regulatory tool.
However, a severe tension exists in the competition law framework. The current application of competition law deprives gig-workers of their fundamental labour right of collective bargaining. Under the competition rules, self-employed are considered undertakings and are subject to cartel rules. In this sense, self-employed wishing to access their right of collective bargaining to join unions and set common working conditions would be coordinating on the market and strictly violate cartel rules. Thus, in practice, gig-workers cannot remedy to collective bargaining to correct their weak economic positions because of their status of undertaking under competition law. As noted by Commissioner Vestager: “We need to make sure that there is nothing in the competition rules to stop those platform workers from forming a union, to negotiate proper wages as you would do in any other business.”7 This paper seeks to assess how this can be done.
Building on existing literature, the purpose of this paper is to present and remedy the inherent tension between competition law rules and collective bargaining rights of the labour law framework, ultimately questioning the adequacy of the current competition law enforcement for the gig-labour market, in light of the EU’s social market model. While collective bargaining has been discussed in competition law scholarship, the existing literature is limited to the competition framework and largely ignores the role, function, and constitutional place of collective bargaining rights. This paper seeks to remedy this by using a more holistic approach analysing both the competition and labour rules through the lens of the social market economy constitution. The overarching research question this paper will seek to answer is the following: How can the current EU competition law and EU and national labour law
frameworks be coordinated in order to enable effective access for gig-workers to labour law protection?
In answering this question, this paper will be structured as follows. The second section will set the scene and shed light on the consequences of the gig-economy in the labour market. It will also explicate the labour law rationale for securing a right to collectively bargaining. Thirdly, a recent complaint brought to the European Committee of Social Rights concerning the denial of collective bargaining rights to self-employed workers because of cartel rules will
6 Stefano (n 4)
be analysed to uncover the multifaceted nature of the right to collectively bargain. Fourthly, the Ordoliberal school of thought, in which competition law is rooted, will be used as an analytical lens to reconcile collective bargaining with competition law in light of the broader Treaty framework. Against this background, the fifth section will firstly explain how current competition law enforcement with a strong economic focus sits uncomfortably with securing the socioeconomic interests safeguarded by collective bargaining. Further, alternative legal routes for dealing with collective bargaining agreements will be explored and demonstrate that competition law might offer more flexibility to except gig-workers’ collective agreements. The sixth section will conclude and answer the research question in full.
2. The platform economy and labour law
The ‘gig-economy’ or ‘collaborative economy’, used interchangeably in this paper, encompasses a wide and ever-changing range of market activities. Notwithstanding the difficulty of pinning down a general definition because of its rapid evolution, the gig-economy encompasses all “business models where activities are facilitated by collaborative platforms that create an open marketplace for the temporary usage of goods or services often provided by private individuals.”8 The common denominator of the platform economy is the appearance of new business models of intermediation in the market. These are characterized by the involvement of three actors: platforms, private individuals – the gig-workers – and, ultimately consumers. This triangular relationship disrupts the conventional binary structure of markets’ organization. Buyers would traditionally meet sellers on the market. By adding a digital intermediary actor which orchestrates the performance of the service through a gig-worker, the creation of value lies in the platform’s ability to connect users (both providers and consumers) on a so-called multi-sided platform.9 Most often, the platforms do not owe the capitals of production but the means of connection, facilitated by the sharing of data and communication, which increases the participation of all economic actors both as consumers and suppliers.10
2.1 Characteristics of the platform labour market and the gig-workers
Platforms drastically changed the ecosystem of work by using different business models, changing the legal qualification of workers and the organizational landscape of the
8 Commission (n 1)
9 William Chou, Iris Li, Lingxiao Zhang,'New Governance of the Platform Economy' (2018) 7,6 Deloitte
Perspective
workplace. The relevance of workers’ legal status is essential when analysing the inherent tension between collective bargaining rights and competition law, fundamental to this research. The organization of the gig-labour relationships towards the platforms explains in itself the increased commodification of work.
The labour market greatly differs from the product market because of the monetary value attributed to human activity.11 Until the emergence of the platform economy, the subordinate employment relation was the prominent feature of the labour force. This phenomenon has influenced the institutionalization of the labour market, cultivated by the labour contract, which is considered the cornerstone of labour law.12 The three legal criteria of the contract of employment: subordination, continuity, and bilaterality, explicitly reflect the rather static structure of the traditional labour market compared to the platform market.13 Provided these criteria are fulfilled, one is considered an employee and not a self-employed. Continuity and bilaterality guarantee of a return on investment costs the hiring firm faces when entering into an employment relationship and guarantee protection to the employee.14 In EU law, the classification of worker is contingent on the organizational criterion of subordination.15 The definition of employee, attached to the autonomous definition of “worker” of Article 45 TFEU, prescribes that a worker, “for a certain period […] performs services for and under the direction of another person in return for which he receives remuneration.”16
In the competition law framework, the criterion of subordination yields an economic value to differentiate an employee from an undertaking, whereby the employee, under the direction of an undertaking, is incorporated into the undertaking. Both employer and employee form an “economic unit”.17 Traditional subordinate work thus recognizes the employee as a weaker party due to his dependence on the firm. In turn, the employee is contractually protected from potential risks attached to carrying the economic activities borne by the firms.18
On the contrary, the platform economy’s labour market is based on app-work, gig-tasks, on-demand work or crowd-outsourcing. The business’s motivations to outsource, without contractual ties, on-demand cheap “tasks” suggest the amateur nature of these tasks that can be executed by any private individual of the “crowd” who would connect to the platforms through
11 Nicola Countouris, 'Defining and Regulating Work Relations for the Future of Work' (2019), International
Labour Organization (ILO), 36.
12 Ruth Dukes, ‘Constitutionalizing Employment Relations: Sinzheimer, Kahn-Freund, and the Role of Labor Law’
(2008) 35 Journal of Law and Society 341.
13 Countouris (n 11) 14 ibid
15 Luca Nogler, Concept of Subordination in European and Comparative Law (University of Trento 2009) 16 Case 66/85 Deborah Lawrie-Blum v Land Baden-Württemberg [1986] ECR I-2121, para 17
17 Case 22/98 Becu and others [1999] ECR I-5665, para 23
the internet.19 The famous Uber (ride-sharing), Deliveroo (food delivery), or Amazon Mechanical Turk (online micro tasking) all operate in similar fashions, representing the archetype of the online labour market. The triumph of Uber is due to its technological innovation, and such innovative businesses are likely to increase with technological developments. Fundamentally different from the traditional labour market, these “employers” are intermediaries whose market powers lie in their ability to connect service providers to end customers and algorithmically coordinate work.20 This vertical disintegration of the firm is highly consequential to the traditional risk distribution between employer and employee, as risks are shifted to gig-workers. The success and enhanced competitiveness of the platform business model can appreciably be attributed to this practice of lowering labour costs through more flexible work arrangements: “the ability to classify [Uber] drivers as independent contractors instead of employees allows Uber to evade the costly protections and benefits guaranteed to workers in a standard employer-employee relationship.”21 Keeping Uber as the platform business model’s poster child, drivers not only incur the costs of gas and car maintenance but also face the risk of accident liability, covered by their insurance. Thus, from the outset, gig-workers are not subordinate to the firm. The platform market lies at the opposite of the traditional market, where subordination, continuity, and bilaterally became independence, flexibility, and multiplicity, with a rejection of the contract of employment.
The death of the employment contract is not specific to the Uber business model; it is the consequences of technological change in the “new economy.”22 Labour lawyers deplore the loss of the traditional employment contract’s protective functions, and the consequential increased precarity and commodification of work.23 Beyond regulating the bilateral terms (working hours, wages, tasks) between the firm and employees, the contract is also a passport to access numerous protective rights enforced by the state, such as, accessing social security. As such, society’s welfare is constructed around a workforce that used to primarily consist of workers.24 Most importantly for this research, with the increasing importance of the employment contract came significant political and decisional power attributed to workers’
19 International Labour Office (ILO),'Digital Platforms and the Future of Work. Towards decent work in the online
world' (2018) ILO
20ibid.
21 Emily Isaac, 'Disruptive Innovation: Risk-Shifting and Precarity in the Age of Uber' (2014), Berkeley
Roundtable on the International Economy
22 Arne L. Kalleberg, ‘A Nonstandard employment relations: Part-time, temporary and contract work’ (2000) 26,
341-365 Annual Review of Sociology
23 Stefano (n 4)
24 Judy Fudge, 'The Future of the Standard Employment Relationship: Labour Law, New Institutional Economics
voices through institutionalized social dialogue between the workforce unions and the government. 25
2.2 Labour law framework and foundations
Core to labour law, collective bargaining rights form an inherent part of the European social model, which significantly expanded with the Lisbon Treaty that introduced the social market economy, confirming the EU’s social objectives.26 As well, the Lisbon momentum constitutionalized labour law and fundamental rights further when the Charter of Fundamental Rights became binding. Article 28 therein ascertains the fundamental right to negotiate and conclude collective agreements.27 A myriad of directives and regulations also codify the importance of social dialogue through collective bargaining for workers of the European Union. Most remarkably, Articles 154(1) and 155 of the TFEU respectively promote labour consultation at EU level and affirms that such dialogue may lead to contractual agreements, and Article 151 TFEU confirms that observance of workers’ rights is a shared objective between member states and the EU.
In essence, labour laws regulate people in the workplace market and seek to afford protection; to prevent the labour market to turn into a commodity market.28 “The fundamental principle of labour legislation is to guarantee the weaker party in the labour market protection and basic rights to be in a fair position when negotiating salary and working conditions.”29 This essentially captures the role of collective bargaining as a core instrument for empowering workers. Concerned with giving a democratic voice to workers and setting fair and humane standards at work, collective bargaining unions are thus recognized by the TFEU as a tool of governance in the workplace, and the institutional level. A different purpose attributed to collective bargaining is regulatory, as it serves as an economic tool to regulate the labour market.30 Indeed, unions participated in significant advancements for workers economic well-being, such as the setting of maximum working hours. As put by Fudge, “contractualization [the increased use of labour contracts] which facilitated labour’s commodification, was
25 Evert Verhulp, ‘The Notion of “Employee” in EU-Law and National Laws’ (2017) COM, DG Employment,
Social Affairs and Inclusion
26 Catherine Barnard, Steve Peers European Union Law 2nd ed (OUP 2017)
27 Council of the European Union, ‘Charter of Fundamental Rights of the European Union’ (2007) OJ C 303/1 28 Catherine Barnard; Peers (n 26)
29 Daniel Blackburn, ‘The role, impact and future of labour law’, in ILO (eds) Labour Law, its role, trends and
potential, 143-144 ILO
followed by trade union and state regulation that limited the extent of labour’s commodification.”31
However, because of their status of self-employed, and thus of undertaking under competition rules due to their independence from the firm, gig-workers cannot benefit from collective agreements without forming a cartel in the classical understanding of the word. It is, in principle, impossible for gig-workers to engage in any sort of negotiation process related to wages or working conditions because they do not form an economic unit with the firm.32 This blanket prohibition and its impact an accessing the fundamental right of collective bargaining will be discussed further in section 3.
2.3 Monopsony failure in the gig-labour market
A mention of the empirical findings on the market failure of the online platform labour market is necessary to depict the exact economic situation of the gig-labour market. This also shows that the precarity of gig-workers is not only a labour law question, but that competition law enforcers have a role to play in, at least, considering such a market failure.
It was remarked above that the market is driven by a few platforms; whose powers are linked to saving on labour costs. The state of the platform labour market has been under the spotlight of economic research, specifically in the US. Findings reveal a serious situation of dominance and extreme bargaining powers of platforms towards the service providers.33 The precarity of gig-workers in the platform economy is linked to the specific monopsonic structure of the labour market,34 comparable to situations of monopolies in product markets but referring to the buyer power of platforms. Economically, the concept of monopsony refers to employers’ ability to unilaterally lowering workers’ wages without facing a loss of labour input. This type of monopsony power is referred to as bargaining power monopsony.35 In essence, it results in strong power imbalances between employers and gig-workers. Where the supply of work is already inelastic as it is in the gig-labour market, the lack of bargaining power reinforces this
31 Fudge (n 24)
32 Suresh Naidu, Eric A Posner and Glen Weyl, ‘Antitrust Remedies for Labor Market Power’ (2018) 132 (536)
Harvard L. Rev.
33 ibid 34 ibid
phenomenon. 36 The practical implication of such a market deficiency is the constant wage stagnation or even decrease.37
The gig-labour market, as such, has received less attention in Europe, but many competition authorities currently scrutinize the dominance of these platforms, and notice “durable concentration and degradation of competitiveness.” 38 As pointed by Posner, a structural issue in the product market itself can already be indicative of strong buyer power and structural issues in the input market. 39
The consensus amongst scholars is that bargaining power through collective bargaining could help to solve at least partly this monopsonic situation.40 Industrial organization theories analyse wage formation in the labour markets in terms of market power with fairly intuitive models. Findings show that asymmetric bargaining power on one side of the market leads to deviations of wages from the competitive equilibrium. 41 This has been observed in the US labour market of the gig-economy.42 The application of competition law – as an economically informed framework – is possible in the labour market, which falls under competition law’s remit. However, competition enforcers have always interpreted collective bargaining rights as an inherent tension to unrestricted trade and competition,43 without considering the monopsonic market failure, nor the fundamental and regulatory nature of collective bargaining. This power imbalance has been vigorously addressed by the European Committee on Social Rights as discussed in the following section, which will elaborate on socioeconomic benefits of collective bargaining.
3. Collective bargaining: a multifaceted right
This section will deal with collective bargaining within the labour law framework and the social market economy constitution. Through the prism of the recent ICTU Ireland decision of the European Committee on Social Rights (the ECSR), 44 this analysis will frame the right
36 Jan Drahokoupil, Brian Fabo, ‘The Platform Economy and the Disruption of the Employment Relationship’
(2016) SSRN
37 ibid
38 See for instance Autorité de la concurrence, ‘L’Autorité publie sa contribution au débat sur la politique de
concurrence face aux enjeux posés par l’économie numérique’ (2020)
39 Organization for Economic Cooperation and Development (OECD) Conference, 'Competition open days'
(February 2020) OECD
40 Naidu, Posner and Weyl (n 32)
41 Pascale Déchamps and others, ‘Labour Markets: A Blind Spot for Competition Authorities?’ (2019) 18 (190)
Competition Law Journal
42 Naidu, Posner and Weyl (n 32)
43Case 67/96 Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie [1999]
ECLI:EU:C:1999:430
44 ECSR, Decisions on the Merits, Irish Congress of Trade Unions (ICTU) v. Ireland, Complaint no.123/2016.
of collective bargaining in the labour law framework to uncover its multifaceted nature. Against this background, the analysis will highlight the economic nature and regulatory function of collective bargaining and reframe it as an economic freedom.
3.1 A fundamental, democratic and social right
The recent complaint to the ESCR lodged by the Irish Congress of Trade Unions (ICTU) disputes the Irish administrative authorities’ decision to exclude self-employed from accessing collective bargaining rights because of cartel rules. The ECSR’s decision unequivocally confirms that the fundamental right to conclude collective agreements applies to self-employed workers, regardless of the competition rules. It remarkably indicates that the latter are not meant to restrict or impose in effect a “complete ban”45 on collective bargaining rights.
The Committee firstly recalled the International Public Law and European law frameworks on collective bargaining. By reference to the European Court of Human Right’s cases adjudicating on the European Convention on Human Rights in its scope concerning collective bargaining,46 the committee coins collective bargaining as a “powerful instrument to protect occupational interests.”47 By noting that current changes in the world of work must be taken into account when determining the scope of cartel rules regarding collective bargaining,48 the Committee affirms that the enforceability of collective bargaining rights cannot rest on the distinction between worker and self-employed.49 Rather, the relevant criterion for allowing collective bargaining to self-employed would be whether there is an “imbalance of power between the providers and engagers of labour,”50 noting that this is exactly the reason the CJEU has declared cartel rules inapplicable to labour agreements between workers,51 as will be discussed later. Self-employed are thus entitled to collective bargaining because of the fundamental character of this right, and because of the democratic function it carries.
Indeed, the right to collective bargaining is “necessary in a democratic society,”52 because of the legitimate aim it pursues. A complete ban on collective bargaining for self-legal systems. They set out the law and can provide the basis for positive developments in socioeconomic rights through legislation and case law at the national and Union levels.
45 ICTU (n 44), para 98
46 Article 11 of the ECHR includes the right to form and join trade unions. Convention for the Protection of Human
Rights and Fundamental Freedoms (1950)
47 ICTU [2016] para 23
48 “The world of work is changing rapidly and fundamentally with a proliferation of contractual agreements, often
with the express aim of avoiding contracts of employment” ICTU (n 44), para 37
49 ICTU (n 44), para 99 50 ibid para 38
51 Albany (n 43) 52 ICTU (n 44), para 95
employed in competition law is “excessive”53 and would undermine the legitimacy of economic and social governance.54 In that regard, a proportionality test was carried out, balancing, on the one hand, the aim of ensuring effective competition and undistorted trade, and protecting collective bargaining on the other.55 The democratic perspective in the decision also affirms the constitutional place collective bargaining is given in the Treaty framework. “Rule of law” and “civilizing” effects pertain to this right,56 both as a democratic tool of countervailing power in the workplace against arbitrary decisions of employers and as a democratic tool on the institutional level. Indeed, collective bargaining bridges workers’ voices into democratic institutions and law-making processes.57 Article 151 of the TFEU setting social dialogue between management and labour as a common objective of the EU and member states expressly confirms this.
Finally, the ESCR notes that social dialogue “has always been an inherent part of European socio-economic process”58 underlying our modern economy. This economic dimension adds another layer to the nature of collective bargaining, making it a socioeconomic right, as it is also present in the European Social Charter which guarantees social and economic rights.59 The Committee points to the necessity of collective bargaining for economic development and the legitimacy of the “outcomes of economic governance.”60 It is remarked that the decrease of collective bargaining institutions on the labour market after the economic crisis has led to growing inequalities, lower wages, and negative effects on working and employment conditions.61 As mentioned later, empirical evidence shows that unions’ presence positively affects the overall economy and has positive externalities on the employment conditions, even for those not represented by unions.62
The ICTU decision extends the number of exceptions from the competition law prohibitions developed in the CJEU case law.63 The decision does not call for a relaxed interpretation of competition rules. Rather, it seeks to affirm that the latter should be complying with fundamental democratic rights beyond the binary worker/self-employed categories. Even
53 ibid, para 98 54 ibid
55 ibid, paras 98-100
56 Guy Davidov, ‘Collective Bargaining Laws: Purpose and Scope’ 20, 30 Int’l Journal of Comp. Labour L. &
Industrial Relations 81
57 ibid
58 ICTU (n 44) para 24
59 European Social Charter (1996), Article 6 60 ICTU (n 44) para 24
61 ibid para 24(2) 62 Davidov (n 56)
63 Bas Rombouts, ‘Ictu v. Ireland: Expanding the Scope of Self-Employed Workers Entitled to Collective
Bargaining Rights in Relation to Competition Law Prohibitions, (2019) 5 (17) International Labor Rights Case Law
though this decision concerned self-employed individuals falling outside the category of gig-workers, it significantly confirms that their fundamental rights of collective bargaining are overlooked in the competition framework. The decision prominently highlights the fundamental character of collective bargaining, which finds political expression in the social and democratic spheres of governance at Union and domestic levels. However, this paper posits that acknowledging the economic nature of collective bargaining right in full is crucial, particularly when considering its relationship with the social market economy model and the competition law framework.
3.2 An economic freedom
Academic literature and labour lawyers label collective bargaining as an economic, regulatory tool for the market.64 The ECSR committee also acknowledges this by affirming the socioeconomic character of this right yet emphasising the political and social dimensions. As such, the social dimension seems to be given predominant weight over the economic one. The balancing exercise carried out by the Committee between undistorted trade and the social interests safeguarded by collective bargaining arguably exposes an irreconcilable tension between the goals of collective bargaining rights and competition law. The need to reconcile this tension is much debated in legal scholarship. It appears that the enforceability of collective bargaining is contingent on the weight given to economic interests in case of a conflict between both.65 Arguably, in light of the economic function of collective bargaining and its place in the social market economy, this tension seems unjustified and should not exist in the first place. Solving this apparent conflict is a matter of method and perspective.66 Rectifying the incorrect conceptualisation of the right of collective bargaining as only a collective social right, and reframing it as an economic freedom would accurately illustrate the way collective unions are formed and how they articulate on the markets, namely in the same way as the economic freedom of an undertaking.67
Firstly, the social dimension of collective bargaining is the product of one’s private autonomy and freedom to contract. The “freedom of contract presupposes economic freedom.”68 In this sense, the right of collective bargaining is first and foremost an individual
64 ibid
65 Vincenzo Bavaro, Vincenzo Pietrogiovanni, ‘A Hypothesis on the Economic Nature of Labour Law: The
Collective Labour Freedoms - Vincenzo Bavaro, Vincenzo Pietrogiovanni (2018) 9(3) Sage Pub.
66 ibid 67 ibid 68 ibid
freedom to join a union like entering into a binding contract.69 The CJEU has also acknowledged this.70 In national legal systems, the freedom to unionize is often referred to as the individual freedom of assembly.71 Only once a union is formed, it is via its individuals that the social and solidarity dimensions are activated through the commonality of interests.72 In this sense, and bluntly put, negating collective bargaining rights or freedom is negating one’s private autonomy and freedom of contract.
Further, scholars Bavaro and Pietrogiovanni suggest that the right of collective bargaining is materially equal to the freedom of an undertaking on the market protected by free movement and competition rules.73 The interests pursued are different, but both collective unions and undertakings have the same function on the market, pursuant to “the freedom of private individuals to […] activate themselves materially and legally in all economic sectors and submit their economic initiatives to the judgment of the market.”74 This has been partly acknowledged in the CJEU’s interpretation of collective bargaining entities in competition law cases. Indeed, the Court did note that collective bodies pursue an economic activity on the market.75 However, the CJEU seems to rank the economic freedom of an undertaking higher than the collective labour freedom in the name of undistorted trade. This limited interpretation falls short of accounting for the exact nature of the economic freedom of collective bargaining, that is, as suggested above, materially identical to an undertaking’s economic freedom to be on the market. As we will see in the following section, coining collective bargaining as a labour freedom is not merely a matter of semantics but a question of accounting for the intrinsic nature of this right in order to reconcile it with competition law’s objective of economic integration.
4. Collective bargaining in the social market economy; the Ordoliberal reading
The legitimacy in protecting gig-workers’ economic freedom to join unions is thus as justified as protecting the economic freedom of undertakings on the markets. As a guarantor of economic freedom, the Ordoliberal school of thought also supports this proposition. Further, it is well established that competition law is rooted in this political framework,76 which sought to
69 ibid
70 Case 201/15 AGET Iraklis v Ypourgos Ergasias and others [2016] ECLI:EU:C:2016:972 para 68: “collective
bargaining body called upon to decide collective agreements […] assert their interests effectively in a contractual process”
71 Bavaro and Pietrogiovanni (n 65) 72 ibid
73 ibid 74 ibid
75 Case 180/98 Pavel Pavlov and Others v Stichting Pensioenfonds Medische Specialisten (Pavlov) [2000] ECR
I-06451
76 Kati Cseres, 'Rule of Law Challenges and the Enforcement of EU Competition Law a Case – Study of
construct a social market economy model based on fair market outcomes, using competition law to achieve such a goal.
The axiom of the ordoliberal model can be coined as “an economic and societal order that guarantees a good functioning of the economic activity and decent human living conditions at the same time.”77 The idea is that free markets can achieve fair wealth allocation for society, provided the market system is legitimate within society. To secure this legitimacy, the Ordoliberals prone the guarantee of economic freedom in the markets, in a framework respecting private autonomy and freedom to enter and compete in the markets.78 In the ordoliberal view, economic freedom sits interdependently between the economic, social and, political order. It is “the precondition and counterpart of other fundamental and political rights such as the freedom of speech, the freedom of assembly, as well as the right to vote.”79 Accordingly, the social dimension of the social market formula pertains to the guarantee of fair market outcomes through securing economic freedom and private autonomy, the absence of which would lessen the meaning of political fundamental rights and democracy. Arguably, collective bargaining rights seamlessly fit into this ordoliberal puzzle. The economic function of collective rights pursues the improvement of the labour market, and democratically legitimizes it. Far from negating the market, collective bargaining rights seek to set fair standards for it.80 Thus, collective bargaining can fit in harmony in the EU’s social market economy in both the social and economic dimensions without structurally distinguishing between both.
4.1 The Ordoliberal and competition law nexus
In practice, the Ordoliberals delegated the task of achieving fair market outcomes to competition law, that ought to operate in a constitution founded on “socio-economic cooperation.”81 Alike the Ordoliberals’ conception of the social market economy, the current EU model composed of an economic and a social constitution is founded on the values of social justice, pluralism of market, competitivity, and the rule of law.82 Since Lisbon, we witnessed
77 Bavaro and Pietrogiovanni (n 64)
78 Jotte Mulder, ‘(Re) Conceptualising a Social Market Economy for the EU Internal Market’ (2019) 15 (2) Utrecht
Law Review
79 Elias Deutscher and Stavros Makris, ‘Exploring the Ordoliberal Paradigm: The Competition-Democracy Nexus’
(2016) 11(2) Comp. L. Rev.
80Bavaro and Pietrogiovanni (n 65)
81 Flavio Felice, Massimiliano Vatiero, ‘Ordo and European Competition Law’, Research in the History of
Economic Thought and Methodology, (2014) 32 Emerald Publishing Ltd
82 Kaarlo Tuori, ‘La Constitution économique parmi les Constitutions européennes’ (2011) t.XXV (559) Revue
an increased promotion of socioeconomic coherence, whereby the social and economic constitutions are meant to work together.83 One of the constitutional goals of the Union is to promote, among other things, the “well-being of its people”84 and aim for a “highly competitive social market economy, aiming at full employment and social progress.”85 In this context, as referred to by Kingston as the “legal systematic argument,”86 the application of any legal framework or Union policy should be consistent with the broader Treaty framework, including the Union’s objectives of promoting social policies and full-employment (Article 9 TFEU). This is also aligned with the consistency requirement between EU policies.87 Hence, within the current Treaty architecture, and the Ordoliberal thoughts, competition policy has a role to play in allowing Union citizens to reap the social benefits of the market economy.88 To this end, competition law ought to firstly safeguard economic freedom and fair market outcomes in the social market economy. Secondly, there is an important link between economic freedom, democratic, and political interests in the social market economy, which is mirrored in the right of collective bargaining.
The above analytical framework helped to fully reconcile labour protection and the economic reasoning of the Union, dominated more and more by competition interests in practice. In contrast, the social market model promoted by the Treaty ought to fit social and economic values in a coherent whole. However, as will be demonstrated in the following section, competition law enforcement seems to be immune to these considerations when dealing with collective bargaining for self-employed, to the detriment of gig-workers.
5. Collective bargaining agreements in competition law
“Labor laws promote and encourage what our antitrust laws forbid: cartels, agreements to fix prices”89
This section will analyse collective agreements within the EU competition law framework and the applicable Article 101 TFEU, and explore the current approach of the Court in considering collective agreements as inherent disturbances to competition in the internal
83 ibid
84 Article 3 TEU 85 ibid
86 Suzanne Kingston, ‘Integrating Environmental Protection and EU Competition Law: Why Competition Isn’t
Special’ (2010) 16 (780) EU law Journal
87 Article 7 TFEU
88 Deutscher and Makris (n 79)
89 Daniel I Booker, ‘Introduction Symposium: The Application of Antitrust Laws to Labor-Related Activities:
market. The first part of this section will analyse the justifications set out in case law for excluding collective agreements from the scope of applicability of competition rules for workers, and secondly, for the self-employed. In this regard, special attention will be paid to the new “false self-employed” category for exempting certain self-employed collective agreements from cartel rules. This category will be confronted with the reality of gig-workers’ work to test its viability. Next, two alternative legal avenues will be explored for dealing with collective bargaining. Firstly, the doctrine of inherent restrictions will be discussed, as it plays a significant role in bringing non-competition interests under Article 101, and secondly, the possible exception under Article 101(3). Instead of being excluded from the scope of competition rules, it will be demonstrated that collective bargaining agreements could be subject to a balancing under Article 101(3) and excepted under this mechanism by virtue of the socioeconomic efficiencies that arise from collective agreements between gig-workers. Doing so will necessitate revisiting the current economics focused interpretation of Article 101(3), showing that this exception mechanism may be flexible towards social non-direct economic benefits.
5.1 Rationale for exempting collective agreements from Article 101(1)
The exemption of collective bargaining agreements is set in case law. This section will elaborate on the justifications developed by the CJEU for exempting collective agreements from the scope of 101(1), firstly for workers and then for self-employed. The analysis will reveal some inconsistencies in the Court’s reasoning and exhibit its discomfort in ensuring that the objective of undistorted competition does not infringe on collective bargaining.
5.1.1 Exemption for workers
The competition framework is inapplicable to collective agreements between workers. In deciding whether this exemption applies, the question must be answered whether the participants involved in the trade union are considered, under Article 101(1), undertakings. In
Becu, 90 the Court set a “general competition law immunity” 91 for collective agreements to fall outside the scope of competition rules for workers. By virtue of forming an “economic unit,” “incorporated into the undertakings concerned,” because of “the fact that they perform the work
90 Becu (n 17)
91 Dagmar Schiek and Andrea K Gideon, ‘Outsmarting the Gig-Economy Through Collective Bar-Gaining – EU
in question for and under the direction of each of those undertakings,”92 the individuals were regarded as workers in the meaning of 45 TFEU. The workers could not be considered undertakings, nor could be their trade union since it acted in the capacity of agent to the workers. Significantly the court engaged with the EU law definition of worker under labour rules as defined under Article 45 TFEU by focusing on the nature of the employment relationship, namely the dependency on the undertaking.
The Court departed from the general immunity established in Becu, without referring to the case, and narrowed the exemption’s scope in the still-standing Albany formula of 1999.93
Albany has been the subject of extensive academic discussions for the possible inclusion of
social policy justifications in the competition law framework. The case arose in the context of a state-imposed mandatory affiliation to individual pension schemes for workers. The affiliation was challenged by the company that wished to exit the funds, claiming that the collective agreement leading to the affiliation was a breach of (now) Article 101(1) TFEU. The Advocate General Jacobs took a strict stand. The AG put forward that nothing in the Treaty excludes social policy fields from competition law.94 The right of collective bargaining and the right of association in the International Labor Convention and the Social Charter were unenforceable “policy goals” 95 instead of fundamental rights. The Court took a more sensible approach and reasoned the exemption on the rationa materiae aspect of collective agreements.96 It took as a point of departure for its analysis the Treaty rules on social policy and dialogue providing for “close cooperation between Member States in the social field, particularly in matters relating to the right of association and collective bargaining between employers and workers.”97 It inferred from this that certain restrictions of competition are “inherent”98 in collective agreements. In light of an “effective and consistent interpretation of the Treaty,”99 the social policy objectives pursued by such agreements would be undermined if workers would be subject to Article 101(1). 100 Having said so, the relevant criteria laid by the Court at paragraph 60 are that the agreement must result from “collective negotiations between organisations
92 Becu (n 17) para 26 93 Albany (n 43)
94 Albany (n 43), Advocate General Opinion, para 124 95 Albany (n 43), Advocate General Opinion, para 146
96 Stein Evju, ‘Collective Agreements and Competition Law - The Albany Puzzle, and van Der Woude’ (2001) 17
(165) Intl’ Journal of Comparative Labour Law and Industrial Relations
97Albany (n 43) paras 55,56 98 ibid para 59
99 Albany (n 43) para 59 100 ibid
representing employers and workers,” and it must have the purpose of adopting “measures to improve conditions of work and employment.”101
This way, the Court left an open-door for social policies to be considered in the competition framework, which is a welcomed development. However, the contours of the autonomy enjoyed by collective agreements from competition rules remain blurry.102 The question of whether the trade union was considered an undertaking was unanswered, possibly because there was no doubt that the individuals of the agreements were workers. 103 Collective agreements thus fall outside the remit of competition law rules altogether when workers are involved, and the Albany formula is unproblematic in such a scenario. For self-employed gig-workers, this formula is unworkable in practice because of the clear distinction between workers and employed workers. In Pavlov, the Court was unequivocal in finding that self-employed persons could not benefit from Albany’s sensible approach to social policies.
5.1.2 Exemption for self-employed?
In Pavlov, the Court has clarified the Albany formula’s personal scope concerning trade unions for employed.104 The Court unambiguously held that a representative body of self-employed medical workers could not benefit from the Albany exemption when setting up a pension fund. This case explicates Albany’s stark limit for self-employed. It illustrates the Court’s reluctance to recognize collective bargaining’s socioeconomic function beyond the binary distinction of worker and self-employed. By succinctly recalling the functional approach to the definition of an undertaking, the Court ruled that the self-employed doctors are to be considered undertakings in the meaning of 101(1) by virtue of the services they provide on the market and the financial risks they bear in doing so.105 The pension fund that had been set up whose purpose was to protect its participants’ economic interests was thus an undertaking.106 The Court also noted that the “Treaty contains no provisions […] encouraging the members of the liberal professions to conclude collective agreements with a view to improving their terms of employment and working conditions.”107
101 Albany (n 43) 102 Evju (n 96) 103ibid 104 Pavlov (n 75) 105 ibid, para 73-77 106 ibid, para 88-89 107 ibid, para 69
5.1.2.1 FNV Kunsten case
Recently, the FNV Kunsten case prompted the Court to engage with the labour law framework to a greater extent than before.108 This case from 2014 concerned substitute musicians for an orchestra, whose trade union FNV Kunsten was challenged by the Dutch competition authority (The ACM) who stipulated that the collective agreement formed by the musicians infringed cartel rules, because they were working under a service contract and not an employment contract – thereby qualifying as undertakings. The Dutch labour rules uphold a fundamental approach to labour law by providing that collective agreement negotiated between social partners can also be lawful for self-employed.109 However, in the meaning of the Pavlov ruling, the ACM put forward that FNV Kunsten was simply an association of undertakings.110 In its ruling, the ECJ took a different approach that is both a blessing and a curse. It created a new category of workers, coined as “false self-employed” within the competition framework based on the Albany exemption. The question is whether this category can benefit gig-workers in the current state of the labour market.
First, the Court confirmed that the collective body representing the self-employed musicians cannot be excluded from the competition rules. It is considered an undertaking by virtue of negotiating on behalf of the self-employed.111 However, if the self-employed persons in casu are, in fact, “false self-employed, that is to say, service providers in a situation comparable to that of employees,”112 the Albany exemption could apply. Significantly, this shows that the Court is willing to depart from the arguably broad definition of undertaking under competition rules and consider the societal relevance of this case. The judges sought to establish an employment status within the competition rules. The Court recalled that the notion of a worker is an autonomous EU law concept. Then, it established the classification of false self-employed as a twofold notion between competition law and the free movement rules. Firstly concerning the notion of undertaking, it stated that a service provides “can lose his status of an independent trader, and hence of an undertaking, if he does not determine independently his own conduct on the market, but is entirely dependent on his principal,”113 because he does
108 Case 413/13 FNV Kunsten Informatie en Media v Staat der Nederlanden [2014] ECLI:EU:C:2014:2411;
Dagmar Schiek and Andrea K Gideon (n 91)
109 Eva Grosheide and Beryl ter Haar, ‘Employee-like Worker: Competitive Entrepreneur or Submissive
Employee? Reflections on ECJ, C-413/13, FNV Kunsten Informatie’in Bellomo, Gundt, Łaga and Miranda Boto (eds) Labour Law and Social Rights in Europe: The Jurisprudence of International Courts. Selected Judgements (University of Gdansk Press 2018)
110 ibid
111 FNV Kunsten (n 108), para 28 112 ibid para 31
not bear any of the financial or commercial risks of the undertaking, and acts as an auxiliary to the latter. Secondly, the Court recalled the worker’s status within the meaning of free movement rules, namely a person acting under the direction of his employer and deprived of the freedom to choose the time, place and content of his work.114
Subordination (acting under the direction of his employer), organizational dependence (forming an integral part of that employer’s undertaking), and economic dependency (not sharing the employer’s commercial risks) seem to be the distinctive criteria for the false self-employed category. These requirements denote a fusion of the functional economic approach specific to competition law, with labour law.115 This interweaving can be welcomed for those self-employed who can be considered false self-employed. However, upon close examination, the exemption is very narrow and unlikely to be workable in practice for gig-workers.116 Subordination seems to remain the distinctive criterion for the false self-employed. As such, the Court did not provide a new distinctive category for false self-employed, but simply provides an escape for misclassified self-employed individuals who could qualify as workers.117 The exemption is modelled after the well-established definition of worker under EU law, rather than a new interpretation based on self-employed workers’ economic realities, leaving the decision up to the national Courts for deciding whether a self-employed is actually an employee-like person.118
The criterion of subordination also equates the lack of flexibility in FNV Kunsten.119 By focusing on this aspect, the Court did not investigate whether the alleged flexibility of the musicians was, in fact, limited to the extent that they would, in reality, not have a choice in performing or not for the orchestra.120 The same applies to gig-workers. As noted by Daskalova, the criterion of subordination is difficult to prove in court.121 The lack of it thereof is usually concealed behind flexibility-restraining conditions set by the platforms, inducing punishment such as user experience ratings, indications of the type of cars to be used for Uber drivers, and strict schedules.122 It is also almost a public consensus that a large – albeit unquantifiable – account of gig-workers report that they consider their “shifts” as genuine employment.123 The
114 ibid para 34-36
115 Victoria Daskalova, ‘Regulating the New Self-Employed in the Uber Economy: What Role for EU Competition
Law?' (2020) 19 (3) Cambridge University Press
116 ibid 117 ibid 118 FNV Kunsten (n 108) 119 Daskalova (n 115) 120 ibid 121 ibid 122 Stefano (n 4)
requirement of flexibility is thus unlikely to be met for gig-workers. As noted by the Commission: “in the context of the collaborative economy, where persons [provide] services through collaborative platforms, this is an indication that such persons would not qualify as workers.”124 “At the same time, persons providing services on more than an occasional basis may be either workers or self-employed, as the actual qualification of their status results from a comprehensive test of all three criteria of “worker.””125 This, at least, exemplifies the uncertainty and confusion the Commission encounters when classifying gig-workers, which is ultimately consequential to the applicability of competition rules.
Additionally, flexibility also embeds the criterion of commercial risk independence to the firm, where evidence of commercial dependence would make successful the qualification of false self-employed. Again, this is highly unlikely to profit gig-workers, since the capital and asset ownership rest on the gig-workers themselves. This has been the subject of manifested discontent on the part of Uber drivers, who contest more and more the risks they have to cover.126
Altogether, the newly created “false self-employed” does not seem promising to exempt gig-workers’ collective agreements from competition rules. FNV Kunsten remains loyal to the prevailing conception of worker. In the US, the competition framework is increasingly perceived as the appropriate place to deal with gig-workers and collective bargaining. The labour framework is also shifting towards a more flexible and accurate depiction of working relationships. Labour law enforcers have developed a “realistic” functional and economic criterion, considering employees as “those workers who, as a matter of economic reality, are economically dependent upon the hiring business, rather than realistically being in business for themselves.”127 The US enforcers of antitrust law are increasingly taking into account monopsony failures in the labour markets and emphasize that power imbalances between workers and employers of the gig-economy and monopsonic situations in the labour market should be accounted for in competition law judgements.128 This echoes with what is suggested by the ECSR the ICTU decision mentioned above.129 In EU competition law, a meaningful market analysis of the market of the self-employed individuals in question is dramatically lacking from the Court’s investigation in competition cases dealing with the labour market.
124 Commission (n 1) 125 ibid
126 Antonio Aloisi, Commoditized Workers. Case Study Research on Labour Law Issues Arising from a Set of
'On-Demand/Gig Economy' Platforms’ (2016) 37 (3) Comp. Lab.L.& Pol’y J.
127 Case 4 Cal.5th 903, Dynamex Operations West v. Superior Court of Los Angeles County [ 2018]
128 The Federal Trade Commission has issued public comments on the monopsony situation in the US labor market
in 2018, encouraging antitrust enforcement to support workers’ rights including collective bargaining. See FTC, ‘Evidence and analysis of monopsony power, including but not limited to, in labor market’ (2018)
5.1.3 Remarks
The case law outlined above forms the bulk of the options available for exempting workers or workers like self-employed from the scope of competition rules from illegal agreements under 101(1). On the one hand, the Court easily finds supporting clauses in the Treaty encouraging social dialogue for workers, on the other, absent the explicit mention of self-employed in the treaties, the economic reasoning of competition law prevails and the binary distinction between worker and self-employed remains an obstacle to exempt self-employed collective agreements. The labour and competition frameworks seem to operate in a “mutually ignorant” way. 130 The recent timid interweaving approach in FNV Kunsten can be, in part, explained by the entry into force of the 2009 Lisbon Treaty, which favoured a firmer basis for the Union’s social objectives.131 Firstly, Lisbon made the Charter of Fundamental Rights binding. Article 28 therein seeks to ensure that workers and employers the right to negotiate and conclude collective agreements at the appropriate levels. Additionally, the inclusion of Article 9 TFEU as an integrative horizontal clause imposing the obligation to integrate social aspects in all policies and activities of the Union could have influenced the progressive approach in FNV Kunsten.132 However, all things kept equal, the false self-employed category is unworkable for gig-workers, and lacks clear guidance. The ECSR has also remarked this in
ICTU.133 It is puzzling that a fundamental right discourse or remarks on the imbalance of power between self-employed and their employers are absent in the FNV Kunsten case.
5.2 Two scenarios for gig-workers and collective agreements
As suggested above, the idea that joint agreements between self-employed workers could be exempted in different ways from the competition rules will be explored. Similar to the exemption from the competition law’s scope in Albany, the Wouters doctrine will be discussed. Alternatively, bringing collective agreements within the scope of competition rules under the balancing of Article 101(3) will be explored, and the relevant criteria will be revisited.
5.2.1 First scenario – The Wouters Doctrine
One of the possible ways to exempt collective agreements from competition rules, as identified in legal scholarship addressing the inclusion of non-competition interests in Article
130 Ioannis Lianos, Nicola Countouris and Valerio De Stefano, ‘Re-Thinking the Competition Law/Labour Law
Interaction Promoting a Fairer Labour Market’ (2019) SSRN
131 ibid 132 ibid
101(1) TFEU, would be using the Wouters doctrine of inherent restrictions to competition.134 In Wouters, the Court acknowledged in relation to a lawyers’ agreement with accountants that: “not every agreement between undertakings or every decision of an association of undertakings […] necessarily falls within the prohibition laid down in Article 85(1) of the Treaty […] account must first of fall be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects. More particularly, account must be taken of its objectives, […] It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives.”135
The Wouters doctrine significantly permits the inclusion of equity and fairness goals in the competition analysis.136 If the agreement at hand addresses a public policy interest by virtue of the objectives it pursues, the exemption lays the possibility to exclude it from the competition law’s scope by using a balancing test between the restriction of the internal market and the necessity of the objectives for the public interest.137 In this sense, the balancing exercise executed under 101(1) involves the weighing of certain public interests within the competition framework. The Wouters formula resembles Albany since the latter also has the effect of disapplying competition rules to the agreement in question. However, Albany lacks the legal certainty provided by the following Wouters criteria.
There must first be a defined public interest pursued by the agreement. In Wouters, the existence of a regulatory framework establishing the necessity of the agreement supported the finding of a public interest. This could be viable for gig-workers regarding the multiple regulatory options existing at national levels for letting certain self-employed to join unions.138 However, the second criterion of the necessity of the agreement for exercising the profession might be too strict for gig-workers. It is hardly conceivable that the Court would regard collective barraging as a necessity for gig-workers to exercise their profession.139 The Wouters formula is also limited because it does not specify which interests of the Member States can be taken into account, nor whether a hierarchy exists between Member States’ interests and the community interest of undistorted competition.140
Altogether, the Wouters doctrine of inherent restriction is a mechanism worth considering for including socioeconomic interests in the competition framework for
gig-134 Case 309-99 C. J. Wouters, J. W. Savelbergh and Price Waterhouse Belastingadviseurs BV v Algemene Raad
van de Nederlandse Orde van Advocaten [2002] ECLI:EU:C:2002:98
135 ibid para 97
136 Wolf Sauter, Public Services in EU Law (chap 4, Cambridge University Press 2014) 137 Wouters (n 134) paras 97, 110
138 Lionel Fulton, ‘Trade unions protecting self-employed workers’ (2018) p.42 ETUC 139 Victoria Daskalova (n 115)
workers joint agreements. Albeit its limitations, Wouters arguably offers more flexibility in scope and opens up the competition framework to public, non-competition policy interests. It is the only current and unique mechanism existing in this regard under Article 101. Albany is a weaker mechanism since it does not lay clear criteria and only focuses on workers.
5.2.2 Second scenario – Article 101(3) exception
In the Article 101 TFEU framework, the individual exception under Article 101(3) TFEU allows undertakings to place a defence against the finding of an infringement of Article 101(1), provided four cumulative conditions are met.141 This paper follows the position that the 101(3) exception is the mechanism that offers the most legal certainty compared to other possible exemptions.142 Pavlov is a missed opportunity for exploring the 101(3) mechanism because no effects on trade resulted from the agreement.143 The following paragraphs will essentially capture the obstacles and shortcomings of the relevant criteria of 101(3) as they are traditionally interpreted in a strict economics focused way for possibly excepting collective agreements under Article 101(3). It proposes a different interpretation in this regard in order to allow socioeconomic and social non-economic interests as legitimate justifications to except collective agreements for gig-workers under Article 101(3). Inspiration is drawn from current competition law scholarship concerned with the orthodox competition law enforcement when fundamental and non-quantifiable benefits of societal relevance such as employment interests are ignored. The possibility for including socioeconomic justifications under Article 101(3) will be firstly discussed, in light of competition law literature and primary law. Then, the efficiency and consumer welfare criteria of Article 101(3) will be reinterpreted in relation to collective agreements for gig-workers in light of the practice of the Court and the Commission.
5.2.2.1 Socioeconomic justifications under 101(3)?
The decentralized enforcement of Union competition rules in 2004 led to reform the application of competition rules to an “economic effects-based approach.”144 As a result, economic analyses now strictly inform the interpretation of the Article 101(3) criteria. Whereas this reform aimed at greater uniformity and legal certainty,145 some debate and confusion
141 Commission Notice, Guidelines on the application of Article 81(3) of the Treaty, OJ C 101/97, 27.4.2004. 142 Richard Wish and David Bailey, Competition Law (9th edn, OUP 2018)
143 Pavlov (n 75); Alan Bogg and Tonia Novitz, Voices at Work: Continuity and Change in the Common Law
World (OUP 2014)
144 Commission, ‘A pro-active Competition Policy for Europe’ (Communication) COM (2004) 0293 final 145 ibid
remain concerning the possibility to except agreements producing socioeconomic benefits that cannot be strictly quantified in terms of a decrease of prices under the efficiency and consumer welfare criteria.146 In light of current central issues, one of which is the current social deficit in the workplace, many scholars condemn that competition law operates in an isolated economics focused way, without having regard to wider Union policy ambitions.147
Prior to 2004, the Commission had exempted certain agreements producing indirect economic benefits to employment under Article 101(3). Such agreements would produce beneficial effects on employment when the market appeared unfavourable to workers, as will be discussed below. Additionally, “goals pursued by other Treaty provisions can be taken into account to the extent that they can be subsumed under the four conditions of Article 81(3).”148 In this sense, there exist a mechanism, and precedents in competition enforcement that would allow elevating the situation of certain gig-workers, if the TFEU’s cross-sectional clauses on the integration of social policy objectives in all EU activities (including competition law) and the promotion a high level of employment for the Union are taken into account in Article 101(3).149 These horizontal clauses are characterized as non-economic policy areas with economic consequences.150 Thus, they arguably permit the inclusion of socioeconomic justifications such as collective bargaining under Article 101(3), provided the benefits can be subsumed under Article 101(3).151 As asserted by former commissioner Monti,152 the possible inclusion of social non-economic benefits should not leave an open door to except anti-competitive agreements. This would deprive Article 101(3) of its role. The primacy of Article 101(3) can be maintained while excepting agreements that would increase efficiencies and contribute to other Union policy goals. “The combination of these two benefits outweighs the restriction of competition.”153 Against this proposition, the efficiency criterion and the consumer welfare criteria will be revisited to create a space to except collective agreements for gig-workers under Article 101(3).154
146 Victoria Daskalova, ‘Consumer Welfare in EU Competition Law: What Is It (Not) About?’ (2015) SSRN 147 Among them, Giorgio Monti, ‘Article 81 EC and Public Policy’ (2002) 39 (1057) Com. Mark. Law Rev. 148 Commission Notice (n 141)
149 Respectively Article 147 TFEU and Article 9 TFEU
150 Saskia Lavrijssen, ‘What Role for National Competition Authorities in Protecting Non-Competition Interests
after Lisbon?' (2010) 35 (5) EU Law Rev.
151 Monti (n 147) 152 ibid
153 ibid
154 The other two criteria of effect on trade and necessity of the agreement are irrelevant for this discussion as
