What’s gender got to do with competition policy?

With gender equality increasingly at the top of political and social agendas and in the run-up to International Women’s Day, Chris Pike of the OECD Directorate for Financial and Enterprise Affairs reflects on the potential for introducing greater gender awareness into competition policy

Competition policy usually thinks in terms of consumers and firms, government and regulators. Traditionally, consumers have been considered only by their willingness to pay, their preferences, their ability to substitute between products offered by firms. Firms are treated as units that are defined by the profit-maximising objectives of their shareholders, and only rarely seen as collections of people. Perhaps this accounts for there being little or no literature on the topic of gender equality and competition. Therefore, consider this article as a set of questions, a potential research agenda, that might at least help us to start thinking about whether there are problems and where they might lie.

Broadly, we can think about the role of gender equality in competition policy firstly in terms of women’s roles within firms, and secondly in terms of their experience as consumers. What differences are there in these experiences from the gender-free ‘consumer’ that we know from our textbooks and legislation?

As sellers within markets

Within the firm, we can think of women’s roles as entrepreneurs, board members, senior managers or self-employed professionals. As entrepreneurs, they can face regulations that bar them from registering a business, or from owning land or wealth. This in turn denies them access to credit with which to finance the entry or expansion of their enterprise within the market, as this study shows. Markets may still appear to be competitive if less efficient male entrepreneurs fill the gaps left by these competitive distortions. However, these entrepreneurs will themselves offer less value and will also provide a weaker competitive constraint on more efficient firms, giving those firms greater market power that may allow them to devalue their offer. Similarly, women may be barred from certain professions or roles (e.g. taxi-driver), again reducing efficiency, reducing competition, and raising prices for professional services. All of these scenarios are first and foremost a disaster for the women involved and a huge waste of their potential economic contribution to the wealth and productivity of their community, as this example highlights. But it is also actively damaging to competition and the efficiency of markets and may entail incumbent firms charging higher prices to all of their consumers. While the predominately-male owners of the firms that benefit from this protectionism will earn greater profits, both male and female consumers who hold little or no stake in these firms are made poorer by these rules. This is why these rules are amongst the many types of anti-competitive regulations that can be identified by the OECD’s Competition Assessment Toolkit.

While these are the more extreme examples of discriminatory restrictions, weaker disincentives and discouragements may well remain in more developed countries. Indeed, these restrictions may not be written down in rules and regulations and may therefore be more difficult to dismantle. Women might still face barriers to joining professional networks or clubs; they may find banks consider them riskier borrowers; they might also face pressure or obstacles from family or society to turn away from professional careers in STEM or Law at an early stage. They may also be disadvantaged by the lack of infrastructure, not in terms of transport systems or public utilities that are required when starting a business, but in terms of access to childcare or families that will take up the slack where childcare is lacking.

While we know something about the profitability that women can bring to firms as board members and senior management (FT, 2017 and Post and Byron, 2015), we know little about the impact this has on compliance with competition rules. Are firms that are led by women more or less likely to collude? Or to abuse positions of market dominance? Are women in senior management roles more likely to whistle-blow on anti-competitive behaviour within their firms (either internally or to external regulators)? Are the deterrence effects of fines or incarceration more or less effective for women in senior management roles? And would they be more or less likely to lead their firms to apply for leniency? Clearly all of these depend on individuals, and particularly on their appetite for risk. However, if in the aggregate there are observable effects, this may then further inform the debate over gender quotas on boards and in senior management positions.

As consumers within markets

On the other side of the market, outcomes for consumers can in some cases differ by gender. This might be because firms – or algorithms employed by firms – think that gender serves as a reasonable indicator of willingness to pay, and therefore seek to price discriminate on the basis of gender. Alternatively, it might be because there are differences in the behavioural biases that tend to be exhibited by men and women. These biases might then mean that some markets work better or worse for women.

On the first count of price discrimination, we know that price discrimination can involve setting different prices to different groups of consumers (groups which might involve just a single person in the case of personalised pricing), or setting different prices for slightly different versions of a product. In many countries, it is illegal to set a different price based on gender, just as it is illegal to set prices based on race or disability (though not age). For example, the European Union ruled that price discrimination on car insurance premiums offered to men and women drivers was illegal. However, most price discrimination by gender that is observed involves setting different prices for slightly different versions of a product and letting consumers self-select, thereby demonstrating their different willingness to pay. For instance, investigations by the New York Consumer Bureau in 2015 identified an average price difference of 7% across five different industries for products that offered versions that appeared designed to encourage men and women to self-select and pay a different price. Going further back, in 1994 the state of California estimated that every year women effectively paid an additional US$1351 for the same services as men (LA Times, 1995 and CA State Senate, 1995).

While this may be seen as unfair, we know that price discrimination often improves the welfare of consumers by ensuring that more consumers are able to buy a product or service than would be the case if a single price were set (OECD, 2016). We can only be confident that discrimination is harmful for consumers as a whole when it is used to force the exit of a rival or to raise their costs. However, under the competition laws of many OECD countries, price discrimination nevertheless remains an offence when it constitutes an abusive exploitation of market power.

Furthermore, continuing within the existing policy framework, where small price differences are sustained, this may indicate that differences in prices do not reflect discrimination but rather the fact that there are two entirely distinct markets which need to be reflected in the market definition that is adopted for the product or service (see, for example, US Horizontal Merger Guidelines). This would mean that any market shares should be calculated separately, which may have a significant effect on an analysis of a merger or in understanding whether a firm is in a dominant position in a given market. This impact on market definition might then mean that agencies become concerned about the effects of a merger or behaviour on female consumers alone, since they constitute the relevant market.

Outside the existing policy framework, going a step further might include the use of gender audits as standard in market studies and exploitative abuse of dominance cases (rare though such cases are). This might in turn deter the practice of differential pricing, though potentially at a cost to total consumer welfare, and specifically to those consumers who currently pay lower prices but who might be expected to pay higher prices or not to purchase at all.

A second reason why markets may deliver different outcomes for women is that their behavioural biases may typically differ from the behavioural biases of men. For instance, we know that more careful consumers, who calculate the potential follow-on costs of their choices, and do not excessively discount those costs, will often end-up paying lower prices than less patient, and more instinctive consumers. If there are significant gender differences in discount values, attitude to risk, and financial literacy and confidence then these may therefore result in different outcomes. These may vary on a market-by-market basis since different biases might be more important, and different types of consumers may be more or less engaged in making an informed choice in different markets. As such, it is not immediately clear whether these differences would lead to women receiving better or worse outcomes. However, the potential for such differences might mean that in some markets remedies that are more effective can be constructed by targeting demand-side remedies at certain consumer groups.

A role for gender in competition policy?

This article outlines a number of potential issues where gender might be relevant for competition policy. On the selling side of the market, anti-competitive effects of explicit or implicit restrictions on female entrepreneurs may exist. Meanwhile, a series of questions could be asked about the potential differences that greater gender equality on boards and in senior management positions would have on firm’s compliance with competition rules. On the consumer side of the market, male and female consumers may experience different outcomes.

What can or should be done about any or all of the above? First and foremost, more research would be welcome. For example, it is encouraging to see India looking explicitly at the impact that its competition reforms have had on gender equality. In the meantime, a sensible response from government to these concerns might be to conduct both gender and more general competition audits as standard when proposing or renewing a regulation or a policy to ensure that their impact is considered.

For competition agencies, there might be opportunities to think about gender within their prioritisation process.  For instance, just as the UK has recently chosen to strategically focus on investigating the effectiveness of markets that are important for those consumers on low incomes, so agencies might focus on markets that form a larger share of women’s expenditure. Where price differences are identified, and a market definition assessment is undertaken, this might need to consider the possibility of different gender-based markets. Market studies and any investigations into alleged exploitative abuse of dominance might include an assessment of whether female welfare- rather than consumer welfare as a whole – would be adversely effected by a particular feature of the market or the conduct in question.


California State Senate (1995), Gender Tax Repeal Act of 1995, AB 1100. Aug 31, 1995
Financial Times (2017), Women boost the bottom line (paywall)
Georgetown University Law Center (2009), Women’s land and property rights in Kenya –Moving into a new era of equality
Ghani, et al. (2017), Gender discrimination versus market competition in India: New evidence, Vox EU
LA Times (1995), State bans gender bias in service pricing
OECD (2016), OECD Competition Committee note on price discrimination
OECD Competition Assessment Toolkit
OECD Roundtable on Consumer Facing Remedies, June 2018
Pike (2016), The end of the bargain? And should we worry? OECD Insights
New York Consumer Bureau (2015), From cradle to cane: The cost of being a female consumer, A study of gender pricing in New York City
Post and Byron (2015): Women on Boards and Firm Financial Performance: A Meta-Analysis, Academy of Management Journal
US Department of Justice, Horizontal Merger Guidelines
World Bank (2017), India development update: Unlocking women’s potential


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