B2B Exchanges Under EU Antitrust Review

Business-to-business online marketplaces are becoming a new area of concern for European Commission competition authorities.

As electronic commerce develops, the number of these Internet exchanges is increasing rapidly, and the European Commission has set up a task force to coordinate policy, Amelia Torres, a spokeswoman for European Competition Commissioner Mario Monti explained early this week. Commission officials also recently participated in a U.S. government seminar on the same subject, she added.

"There are no precedents, so until we build up our understanding, we will examine each case on its own merits," Torres said.

On August 7, the Commission is expected to issue an initial ruling on one of its first decisions in this area as regards plans by United Technologies Corp.

(UTC) and Honeywell International Inc. to set up MyAircraft.com, a joint venture to sell aircraft equipment over the Internet.

The Commission's initial attitude towards such electronic marketplaces is positive, because they will increase transparency to transactions among companies and drive down consumer prices, which will benefit the entire European economy, according to Torres. However, the Commission still has to look at the antitrust implications the online exchanges will have on the market or markets they target.

Because the exchanges combine the purchasing and selling power of large companies, the Commission wants to make sure that such collective strength does not give the involved companies an unfair competitive advantage.

Another major case involves plans by three large automobile companies, General Motors Corp., Ford Motor Co. and DaimlerChrysler AG to set up Covisint, an Internet exchange offering procurement transactions for the three carmakers as well as other auto manufacturers and their supply-chain partners. The Commission is still waiting for formal notification of this venture, which was announced in February, Torres said.

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