Expect a crackdown on HR practices that violate antitrust laws: the labour market needs competition too

Competition law agencies globally are increasingly cracking down on practices such as no-poaching and wage-fixing agreements. Some countries have also published guidance to explain business practices that affect workers and may violate antitrust laws. The Competition Commission of India (CCI) is also investigating a global no-poaching arrangement among three fragrance companies (Givaudan, DSM Firmenich and IFF). One of these blew the whistle and admitted to its wrongdoing before the CCI to seek a reduction in penalty. The other two companies have reportedly also filed for leniency. No-poach practices also exist in India, especially in sectors like information technology (IT) and banking. In 2024, a senior banker revealed an informal understanding among three large private banks to not hire each other's junior-level employees to curb high attrition rates. There have been reports in the past of an informal understanding between the Reliance and Adani groups. Recently, the CEO of an outsourced semiconductor assembly and test firm proposed a no-poach approach in the sector. Such arrangements have largely avoided competition law scrutiny so far, but that may change now. Collusion among employers may also take the form of anti-competitive practices such as wage-fixing. This practice aims to align employee remuneration and includes an understanding to fix a range or ceiling on components such as basic pay, bonuses or annual increments. For example, a handshake between two IT companies to limit annual salary increments to about 5% could amount to wage-fixing. Notably, collusion among employers is prohibited not only in the context of traditional employment, but also extends to freelancers and gig workers. In 2025, the UK competition authority imposed penalties totalling about £4 million on various sports broadcasters for aligning payments to freelancers with the aim of avoiding bidding wars. Moreover, even an exchange between employers on recruitment strategies or employment terms can violate competition rules. Such exchanges could also take place through informal channels like WhatsApp and LinkedIn, or calls between human resource (HR) teams. The growing use of artificial intelligence (AI) tools in recruitment processes adds a further dimension to antitrust risks. For example, if pursuant to an understanding, a company's AI-enabled recruitment tool is programmed to exclude candidates from a particular competitor, this would fall foul of competition law. While AI tools can significantly improve hiring efficiency, the CCI has cautioned businesses to audit their use for anti-competitive conduct. Given the global antitrust focus on labour issues, informal exchanges among competing employers to discuss salaries or restrict talent mobility may no longer just be bad etiquette, but a law-compliance risk. Businesses must, therefore, proactively invest in competition compliance initiatives. A good starting point would be to audit HR policies and their informal practices to identify risk areas. To mitigate the risk of inadvertent contraventions, HR teams must undergo regular competition law trainings to understand basic dos and don'ts. Some customary practices may now require fine-tuning to balance legitimate objectives (such as protecting investments in employee training and ensuring retention) against the legal directive of engaging in vigorous competition for talent. The CCI must also identify antitrust issues specifically in the context of Indian labour markets. This can be done by undertaking a comprehensive market study and engaging with trade unions, HR agencies and other stakeholders. This study could also assist the CCI in understanding other technical challenges peculiar to labour markets, such as defining relevant markets and assessing market power of an employer, which various mature jurisdictions are also grappling with. This would enable the CCI to expand antitrust scrutiny to certain unilateral practices of dominant employers, which can make exits difficult and reduce employee mobility (e.g. onerous non-compete agreements, exit fees and training-repayment clauses in employment contracts). A calibrated enforcement approach taken by India's competition authority, coupled with proactive compliance initiatives by businesses, could foster healthy competition in Indian labour markets and complement the government's labour reform initiatives. The authors are, respectively, head and senior associate, CompLaw.