As we celebrate International Women’s Week in various different ways, we have also been reflecting on gender and competition policy. This is an area which has been coming under increasing focus, and which our Brussels competition team is monitoring closely.
Two key themes are the opportunity for competition authorities and practitioners to adopt a gender lens, and the role that competition law could play in promoting equality between genders.
Both these themes were recently considered as part of panel sessions at the OECD online workshop on Gender Inclusive Competition Policy, held on 25 February 2021, which discussed the preliminary findings of seven selected research projects.
We set out in this blog post a summary of the key points discussed by the panels, highlighting some interesting issues for further consideration.
Gender and Cartels
- Despite the prominence given in economic literature and in legal criteria and analysis to the incentives of firms to collude, cartels are arranged between individuals. Available sociologic literature indicates that each person has personal traits and characteristics that are shaped by a range of factors, including their gender.
- Research highlighted at the OECD workshop considered this issue and in particular whether gender plays a role in individuals’ propensity to cartelise and whether potential causal links can be identified between persistence of cartels and a lack of diversity in corporate boards and senior management. The researchers considered that female exclusion at work is a potential risk factor, since evidence from previous cartel cases illustrates that collusion often occurs through entrenched informal masculine networks, the so-called “Boys’ Club Dynamic”.
- These preliminary findings signal a potential interplay between competition policy and corporate governance law. For example, it is possible that gender quotas in management boards might decrease the risks of collusion caused by a lack of diversity. In the meantime, more effective enforcement of anti-cartel laws might encourage companies to further include women in the workplace in order to promote compliance with antitrust law.
Gender in market analysis
- The OECD workshop also focussed on the impact of gender in market analysis. Two of the selected research projects have been making great progress towards the provision of guidance on whether, and how, public authorities and practitioners should incorporate gender considerations when conducting surveys and simulations.
- Men and women were found to have different preferences, price-sensitivities and propensities to switch. For instance, women appeared less likely than men to subscribe to two different sport channels. In practice this means that, depending on gender, certain products could be either complementary or substitutable.
- Additionally, questions were raised as to whether the outcome of certain cases would have been different if authorities had undertaken a gender segmentation of markets when analysing mergers. The research highlights that caution should be observed when defining markets for homogenous but highly-gendered products (such as wet shave razors). A higher level of concentration in one of the gender-based segments may indeed increase the risk of gendered price discrimination, otherwise called a “Pink Tax”.
Gender considerations and public interest
- The OECD workshop also discussed the role of public interest in competition analysis, particularly in relation to gender considerations.
- In particular, members of the Competition Court of South Africa discussed lessons which could be learnt from the experience of South Africa in taking public interest considerations into account in formulating competition policy. They explained that South African competition policy has developed to take into account addressing issues specific to “Historically Disadvantaged South Africans”, both in terms of prioritising certain enforcement initiatives and at the stage of developing and implementing remedies.
- In the European Union, the integration of public interest considerations into competition law currently revolves around the scope of the “economic efficiencies test”, which allows firms to highlight the positive impact of their agreements and of their behaviours on the economy. Some of the literature and legal practitioners are in favour of broadening this defence in order to encompass public interest considerations (such as on environmental priorities, labour rights, and gender equality).
Herbert Smith Freehills’ Brussels office will continue monitoring future developments in this area. More information can be found on the OECD website, including details of a second expert workshop on this topic in June 2021.