The Firm Exemption and the Hierarchy of Finance in the Gig Economy

14 Pages Posted: 30 Jul 2019 Last revised: 14 Apr 2020

See all articles by Sanjukta Paul

Sanjukta Paul

University of Michigan Law School

Nathan Tankus

Modern Money Network; Global Institute for Sustainable Prosperity

Date Written: July 24, 2019


Worker-owned or controlled firms face a little-studied threat from antitrust law that typifies broader problems with the current antitrust paradigm, namely that it favors coordination through concentrated ownership and control while disfavoring coordination through democratic participation, for example by workers. Our existing system for provisioning credit reinforces, at multiple levels, antitrust’s criteria for allocating economic coordination rights. The so-called gig economy illustrates these problems especially acutely. Incorporation by workers, producers, or service-providers is not—without structural reforms—a solution to the antitrust paradoxes created by the gig economy. We show that a firm created and controlled by ride-share drivers or other individual service-providers would have difficulty qualifying for antitrust’s firm exemption under existing law. More, this differential legal obstacle is exacerbated by the hierarchy of finance. In contrast to dominant firms, which have relied on venture capital and now the financial markets to invest in molding their regulatory environments, worker-controlled firms will not be able to access finance in analogous ways—for reasons that largely track and reproduce antitrust's firm exemption itself.

Keywords: antitrust, price-fixing, theory of the firm, firm exemption, worker cooperatives, finance, hierarchy of finance, gig economy

Suggested Citation

Paul, Sanjukta and Tankus, Nathan, The Firm Exemption and the Hierarchy of Finance in the Gig Economy (July 24, 2019). University of St. Thomas Law Journal, Vol. 16, No. 1, 2019, Available at SSRN: or

Sanjukta Paul (Contact Author)

University of Michigan Law School ( email )

625 S State St.
Ann Arbor, MI 48109
United States

HOME PAGE: http://

Nathan Tankus

Modern Money Network ( email )

Global Institute for Sustainable Prosperity ( email )

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