A role for competition policy in fighting gender inequality: not a matter of if, but how

Competition policy is normally thought to be fit at promoting and protecting effective competition in markets, this way enhancing efficient outcomes to the benefit of consumers. As a result, while one may point to some indicia on the relevance of other public interests and values (let us consider, for instance, Articles 101(3) and 106 of the Treaty on the Functioning of the European Union (‘TFEU’), or even some decisional practice and case law), the truth is that there is not much openness to expand or restrain the scope of competition policy, so as to either address, among others, concerns over gender equality, or to refrain from acting, when this may pose a danger to the protection of those values.

Such ‘negativism’ actually is, in our view, a fruit of how the question has been put.

Does the problem necessarily imply changing the scope or objectives of competition policy? Isn’t it possible to consider existent normative frameworks, thus avoiding that discussion?

Fortunately, some winds of change are now blowing and questioning the role that competition policy could or should play in relation to values, other than its ‘traditional’ goals. While we believe that these purposes may all be included in a broader mainstreaming trend, it is important to carefully consider their specificities, in order to avoid wrong extrapolations.

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Gender equality and competition policy: a new challenge and a bigger one

There is already a remarkable work on the potential interplay between competition and sustainability. The issue remains controversial, however.

Indeed, while several national competition authorities (‘NCAs’) have started launching interesting initiatives aimed at assessing the compatibility of sustainability projects with competition law, the position of principle is that ‘Competition policy is not in the lead when it comes to fighting climate change and protecting the  environment. There are better, much more effective ways, such as regulation and taxation.

This has not prevented that, more recently, a new (and, in our view, more challenging) question emerged, as to the possibility of finding a relationship between competition and gender equality.

Unlike other current research on mainstreaming problems and opportunities, this newer debate is of a different nature, insofar as it seems harder to internalise the problem. In other words, it is more challenging to integrate gender issues into the tools and benchmarks of competition policy.

Let us just think of these two questions: is it possible to regard gender equality as an ‘efficiency’ or ‘innovation’ problem? May gender be considered by NCAs, when defining relevant markets?

As a matter of fact, while it seems undeniable that ‘Competitive markets can support the green transition, by driving companies to make better, more efficient use of resources’ or that there is a growing demand for ‘greener products’, existing studies on the impact of gender diversity on the company’s performance and efficiency are somewhat contradictory.

As a result, considering i) the uncertainties on the relationship between gender diversity and the company’s efficiency or ii) the less clear-cut identification of a growing demand for ‘gender equality friendly’ products, the added challenges of this working front become clear. Such difficulties do not legitimate, however, ignoring the elephant in the room.

In our view, the ongoing research on the topic, while still in its early stages, appears to be well-targeted, insofar as it tries to fill in the gaps in the relationship between gender equality and the goals or scope of competition policy, by studying how the former may be viewed or envisaged as a problem for/of competition.

In other words, while it is possible to argue in favour of a more comprehensive and cross-cutting competition policy by enlarging its ‘traditional’ goals, this path may actually prove more difficult since it will tend to touch on political choices.

If, on the contrary, we do internalise the problem, by seeking to identity whether (and what) gender has to provide to competition policy or whether the latter may (without any further widening or limitation of its scope) help fighting gender inequality, harmonisation will be easier.

By resorting to this second approach, we leave the scope of competition policy untouched. We simply test whether adopting a gender lens may i) help identifying and addressing not so evident market failures, ii) justify different analysis by competition enforcers and agencies (for instance, when defining product markets), or even iii) promote adjustments in the design of leniency rules or compliance programmes, as to render them more effective.

Current state of the discussion

On 25 February 2021, the Organisation for Economic Co-operation and Development (‘OECD’) promoted an open workshop, aimed at presenting and discussing seven projects, all of which try to explain why gender concerns may not fall outside the scope of competition policy (a broader term than Competition Law).

Even for those who do not go to the point of accepting (or actually reject) a special focus of competition policy, directed at ensuring equal opportunities or fighting discrimination, it is possible to maintain that competition policy cannot be secluded from its context and may not – especially in the European Union (‘EU’) – be isolated from its systematic and teleological framework. Put simply, competition is one of the main values enshrined in Treaties, but it is not ‘the’ value, or a ‘more important’ one.

Quite the opposite. Article 3(3) of the Treaty on European Union (‘TEU’) appears to treat competition as a condition or feature of the internal market, among a wide range of objectives that are to be achieved. The fight against social exclusion and discrimination, and the promotion of social justice and protection, as well as equality between women and men is one of them. Accordingly, it follows from that provision that the EU no longer limits itself to economics, but it is also concerned with other public values, goods, and fundamental rights.

In this respect, a clear proof of such broad consensus may be found in Article 8 of the TFEU, which specifically notes that ‘In all its activities, the Union shall aim to eliminate inequalities, and to promote equality, between men and women’ (not to mention Articles 21 and 23 of the Charter of Fundamental Rights of the European Union). At International level, positive duties regarding gender equality are also drawn from the Guiding Principles on Business and Human Rights, which is addressed to both public entities and private individuals.

It is therefore without doubt that fundamental rights and principles, embodied in national Constitutions and in the EU (and international) law, bind, not only companies, but regulators and agencies, as well. Consequently, the introduction of mainstreaming objectives will always find some degree of legitimisation in primary law.

It is, of course, true that, from the letter or even spirit of such provisions, we cannot draw any conclusion as to how the relationship between the values referred to therein is realised in practice. And this is precisely what might prove particularly worrying for NCAs, if we think that, while being competent to apply European Union Law, NCAs have their activity framed by national legislation of variable geometry. In any case, while we will confine ourselves, here, to the scope of EU law, it is a clear source of law in the Member States that we are talking about. As a result, conclusions at the EU level may well also be taken up at national level.

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Making gender a competition issue

Having concluded that competition policy is legitimated to play a role in fighting gender inequality and discrimination, it is now time to see how that conclusion may be translated into reality.

From a normative point of view, it is possible i) to draw inspiration from constitutional doctrine on how to solve conflicts and collisions between different rights and values (when, and if they clash), as well as ii) to assume that gender inequality and biases actually impact on the functioning of markets, making a gender lens necessary to render markets and competition enforcement more effective.

Of these two methods, only one actually elaborates on the ‘bi-directional relation between competition and gender’.

To put it simply, while the first one (i) is aimed at solving cases in that the protection of competition as such points to a scenario or an outcome that may actually enhance gender inequality (i.e., the two values clash), here, we focus on the second conciliation method (ii) which tries to address the very opposite scenario. A scenario in which the two values no longer point towards different directions or outcomes, but rather complement each other, calling for the adoption of a certain course of action.

Indeed, the relationship between different policies and values – in this case, competition, on the one hand, and gender equality, on the other – may not necessarily be about letting a certain value prevail over another, or simply ignoring one of them.

On the contrary, it may also be a relationship of complementarity and a win-win situation. In other words, a symbiosis may be found, for instance, if we prove that there is a relationship between gender board diversity and the propensity to engage in anticompetitive behaviours, or if we address concerns such as ‘pink taxes’, the perpetuation of biases by gendering products, or gender inequality as a market failure.

Such symbiotic relationship may, for instance, lead NCAs to identify ‘price discrimination markets’ this way avoiding that ‘mergers that reduce competition for gendered products might not be challenged, potentially leading to increased price differentials, or that exclusionary practices are permitted on the basis of illusionary competitive constraints from producers of “other-gender” products’.

Besides, if we consider, in particular, the relationship between gender and compliance with competition law, maybe it is time to assume that an inclusive competition policy should build its tools, conscious of the fact that incentives might vary according to gender. As a result, by not confining the ‘reward’ to financial incentives, we may actually increase the propensity for ‘other’ individuals to blow the whistle on cartel behavior.

A third opportunity for NCAs may, of course, relate to prioritization, where gender inequality is at stake.

In search of a place for gender equality in competition policy

The right place of these recent proposals in competition policy is not easy to find.

The recipe for success lies in the avoidance of two types of errors or risks: i) ending up making the situation even worse, and ii) resorting to abstract theories with no practical application or consequences.

Regarding the first risk, it will be important that studies on the relationship between competition and gender equality avoid the consideration of women or men as homogeneous categories, a perspective that may be misleading. From a legal point of view, it ignores the complexity of scenarios of intersectional discrimination, whereby we have not only gender, but a combination of factors such as race, ethnicity and education, that may certainly influence the results of research on ‘gender and competition’.

Also, we are of the opinion that the focus should be on gender – no matter what it is (or is not…) – and not on women, as such, since such an approach may lead to the perpetuation of situations and feelings of greater inferiority and nominalisation of the weaker. Finally, the problem may lie, in some industries, or in the near future, in the discrimination of other genders. Therefore, research should be constructed in a way that responds to gender problems and not to problems relating specifically to women.

As to the second point of concern, it is always worrying when there is no follow-up to the conclusions reached. We strongly believe that a study without practical influence or impact is – no matter how interesting -, nothing but a piece of paper, or an Excel of data. In other words, conclusions have to be meaningful and for that, they have to find their concrete place and a proper role in the policy at hand. Indeed, if this common bond between gender equality and competition policy is confirmed, it will be necessary to identify to what extent it could be considered and have a place in the design of this policy.

For that, questions such as whether to support compliance programs that include aspects related with a company’s corporate governance (such as gender board diversity), or whether regulators would value such programs, for instance, as mitigating circumstances, in determining the level of sanctions, might be one of the possibilities.

If we now move to leniency and whistleblowing, different sensitivities to incentives may force us to rethink whether the ones embedded in the laws are appropriate to deal with different gender perspectives. Finally, it could also be interesting to test whether this mutual influence adds more arguments in favour or against a resort to binding quotas.

To sum up, while it is undeniable that competition policy has a role to play in fighting gender inequality, the question is on how and when this does actually materialise. Our opinion is that, internally or externally, on a constant basis or circumstantially, competition policy may prove itself a valuable key player in the fight against inequality. All of this, without the need to wander in unknown lands, or to internalise policies for which it is not dogmatically prepared. But simply by acknowledging that, like all other policies, it has its limits, and that there are different types of failures with which it has to deal.

Perhaps it is nothing but a matter of uncovering hidden problems and seeking to address them. Old problems, old tools, a new approach.

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Inês F. Neves

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