The UK Competition and Markets Authority (CMA) published its Competing for Talent guidance, on 9 September 2025, setting out how competition law applies to recruitment and pay. Coming shortly after it issued fines for collusion on freelancer rates, the message is clear: labour markets are now an enforcement priority for the competition authority.

1. Just as businesses compete for customers, they also compete for talent

The new guidance makes clear that competition law applies just as much to how firms recruit and reward staff as to how they sell products or services. Businesses who do not compete for customers, may, however, compete for talent, and this dynamic is also subject to competition law. This is not new law, it is simply a reminder of the application of existing rules to labour markets. 

Three categories of conduct are in the spotlight:

• No-poaching agreements – formal or informal understandings not to hire or approach each other’s staff.
• Wage-fixing – aligning salaries, bonuses, benefits or other terms of employment.
• Information exchanges – sharing sensitive information on current or future pay, benefits or hiring intentions.

The rules apply whether the individuals concerned are employees, freelancers, contractors or gig workers.

2. Why it matters

Labour markets are firmly on the CMA’s radar, and the consequences of getting it wrong can be significant:

• Cartel treatment: The CMA views all three above-mentioned practices as cartels, and 'by object' infringements, meaning that the CMA does not need to demonstrate that these infringements had an actual anti-competitive effect on the relevant market – the anticompetitive ‘object’ of the agreement is enough to establish an infringement.
• Severe sanctions: Businesses face (i) investigations and fines of up to 10% of annual worldwide turnover, (ii) director disqualification for up to 15 years, (iii) exclusion from public contracts and (iv) exposure to damages claims. Individuals can also face criminal liability.
• Not just formal agreements: Unwritten understandings, side letters or even casual conversations at industry events can fall foul of the law.
• Concentrated markets are high risk: Where only a few firms compete for talent, even sharing “average” or historic pay data could be problematic.

3. Compliance in practice

The CMA’s guidance is not just theoretical – it sets out concrete steps businesses should take now to reduce risk. Businesses operating in competitive labour markets need to look closely at how they structure agreements, handle data, and train staff. In particular, the following areas deserve immediate attention: 

• Review contracts: Scrutinise no-poach or non-hire clauses in commercial agreements — they must be necessary, proportionate and time-limited.
• Audit data sharing: Participation in salary or rate surveys is only safe under specific circumstances, including data being anonymised, aggregated and collected by an independent third party.
• Train staff: HR, recruitment and business managers need competition law training, not just employment law updates.
• Respond correctly: If sensitive information is shared by a competitor, distancing measures can be implemented to minimise exposure.

Five practical questions to ask your business today:

1. Have we checked our contracts? Do any outsourcing, JV or M&A agreements include no-poach or non-hire clauses that go further than necessary?
2. How do we benchmark pay? Are salary or contractor rate surveys anonymised, aggregated and run by an independent third party?
3. What do our HR and recruitment teams know? Have they had training on competition law risks — or are they still treating this as an “employment-only” issue?
4. Do we know how to respond if a competitor mentions pay or hiring plans at an event?
5. Is there a clear internal escalation point for potential competition law issues in recruitment and pay?

If you would like to discuss what these changes mean for your organisation, or need training or support in reviewing your practices, please contact Dr Saskia King, Ariane Le Strat and Tenisha Cramer.

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