The purpose of this working paper is to bring a behavioral lens to the review and analysis of the competition literature on labour market power, monopsony, and oligopsony, the behavioral and more conventional labour market economics literatures that are relevant to labour market competition and power, and the interactions between these literatures that should be explored in future research and policy analysis from both a competition and labour market perspective. This research is needed to support the efforts of Canadian and other competition authorities and regulatory agencies, which have competition responsibilities and/or influence market competition at the national and sub-national scales, when they are placing greater priority to: (i) assessing and remedying monopsony power in labour markets, (ii) the resulting worker, economic, and social harms, and (iii) the interactive and feedback effects from imperfect competition in labour markets that can amplify market power and consumer harm in product markets. The competition, labour market and related literatures emphasize how and why anticompetitive conduct in labour markets can generate worker, economic, and social harms, which are equivalent to and in some contexts can be greater than the consumer, economic and social harms that result from anticompetitive behaviour in product markets. Previous research stresses that labour markets are very different from product markets. Therefore, the competition standards, market share thresholds, enforcement practices, and investigative, analytical and remedy techniques utilized by authorities when conducting collusion, merger review, dominance, and other enforcement cases from a labour market perspective will need to be modified to accommodate these differences. The working paper especially emphasizes the behavioral, emotional and psychological dimensions of the complex employer/employee relationship and labour market economics and competition more generally, which will need to be extended to the labour market investigations, analyses, and remedies of competition authorities. This will require in particular expanded research in the future regarding the under-analyzed linkages and interrelationships between behaviorally informed labour market economics and policies; and the expanding and increasingly sophisticated application of behavioral economics to industrial organization economics and competition policy and law. Special emphasis is placed on the challenges that Canada’s Competition Bureau, and the country’s many national and sub-national labour market regulators, can be expected to face when current consultation and other processes to reform the Competition Act are completed. One possible outcome would be much greater priority to wage-fixing and other forms of labour market collusion and anticompetitive conduct in: (i) the Canada’s reformed Competition Act and (ii) the Bureau’s future enforcement, deterrence, compliance promotion, advocacy, education, market studies and investigations, and other functions encompassing many of the major sections of the Act. The working paper highlights the many reasons why effectively addressing wage-fixing, collusion and other anticompetitive conduct in conventional and digital labour markets will be both very challenging and highly important for Canadian and other competition authorities in order to: (i) promote healthy competition and interfirm rivalry in labour and product markets, (ii) enhance worker and consumer well-being, social welfare and the health and competitiveness of the small business sector, and (iii) contribute to reducing wage, income, wealth, opportunity, gender, ethnic minority, and many other forms of inequality
