Under The Microscope

Dec. 21, 2004
Trading exchanges, like any joint-venture activity, have the potential to raise antitrust issues.

The potential of online trading exchanges has not only set the B2B world abuzz, it has attracted the attention of federal regulators as well. Since both buying- and selling-based trading exchanges will provide competitors the opportunity to collaborate, they have the potential to impair competition. Covisint, the new automotive industry exchange, for example, is being investigated by the FTC, confirms Howard Shapiro, senior public affairs representative at the agency, although he is mum on the nature of the inquiry. The basic issues of FTC antitrust scrutiny involve sharing of information, ramifications of joint buying or selling, and membership and participation as they affect options of doing business. These issues and others were discussed at an FTC-hosted workshop in Washington at the end of June. Some specific questions being asked include:

  • What mechanisms are included to prevent inappropriate sharing of competitive, confidential information on things like pricing, capacity, and trading patterns?
  • What opportunities exist for collusion, in particular price fixing or signaling, among competitors of significant market power?
  • Might exchanges take the form of exclusive arrangements that freeze out would-be competitors? "These are all complicated issues," says Susan DeSanti, the FTC's director, policy planning. "But if we learned one thing at our B2B workshop, it is that there are a lot of different business models for the e-business marketplaces. Some of them may raise antitrust issues, some may not. So you cannot talk about it as a global concern about trading marketplaces." Her advice for corporations thinking about participating in a trading exchange? "Just as with any joint venture you should check with antitrust counsel. Are there potential antitrust issues? Yes, but it depends on how the trading exchange is structured. It is very much a case-by-case basis."
  • Popular Sponsored Recommendations

    How Manufacturers Can Optimize Operations with Weather Intelligence

    Nov. 2, 2023
    The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

    Why DataOps may be the key to unlocking the full potential of digital transformation

    Nov. 3, 2023
    Read the 2023 market survey conducted by IndustryWeek

    Digitally Transforming Data and Processes With Product Lifecycle Management

    Oct. 29, 2023
    Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

    Guide to Turning Product Data into Profitable Content and Experiences

    Sept. 11, 2023
    Businesses can lose up to 9.5% of their annual revenue due to bad digital experiences. This guide highlights the need for enriched product content to deliver profitable content...

    Voice your opinion!

    To join the conversation, and become an exclusive member of IndustryWeek, create an account today!