> paying top of market rate

I thought that was just marketing puffery...

Yup... HR call it "benchmarking"

You don’t even always need a third party. My wife works in HR for the government and part of her job is literally to contact neighboring counties and send them requests for their salaries for various positions and levels while filling out salary requests from other counties.

Of course, being government, it’s all public information anyway so collaborating in this way is seen more of a performance increase vs manually accessing each counties salary information but it’s the same premise.

Not sure if the parent's concern is valid but I think the argument would be that companies can conspire to all suppress wages so they don't have to compete on comp. That would be hard to do now because they can't "officially" conspire in this way (eg sign a binding contract with each other) because that would be illegal. Without an enforcement mechanism it is too easy for any one company to defect from the "gentleman's agreement" and offer higher wages. If all salary information was public though, then as soon as one company defected and offered one high-value employee a higher salary everyone else would immediately know it and start competing on salary again. So that makes the informal agreement more stable and leads to lower wages.