FTC says B2B still monopoly threat

Although the business-to-business market has cooled down during the past year, federal officials are still concerned about competition and antitrust issues.

2 min read
Although the business-to-business market has cooled down considerably during the past year, federal officials are still concerned about competition and antitrust issues that may arise.

A Federal Trade Commission workshop that ended Tuesday addressed many traditional antitrust questions in the context of e-commerce technologies in the business-to-business and business-to-consumer sectors, federal officials said.

A year ago, executives from several online business-to-business companies, including Commerce One, FreeMarkets and MetalSite, discussed questions and concerns from federal regulators regarding the then-budding business-to-business industry.

No new policy was hammered out at this year's conference, but the FTC said it plans to use the information as it considers possible industry guidelines.

"There are ways to structure these ventures while having them comply with existing antitrust laws," said Susan DeSanti, director of policy planning at the FTC.

The commission addressed issues such as the potential for a small number of powerful blue chip companies to get together and use their collective purchasing muscle to drive down, or even fix, prices.

Already, one high-profile exchange, Covisint, in the automotive industry, has been investigated for exactly that reason. That probe has since been dropped and Covisint was given the green light by the FTC in September.

When the FTC held its first meeting last year, it highlighted four areas where online exchanges could potentially run into antitrust problems, but it concluded that the market was still too small to issue any specific directives.

"At the time there hadn't been the consolidation in the B2B market that we have seen now," DeSanti said.

William Cohen, deputy director of policy planning for the FTC, said the same four areas--information-sharing agreements, joint purchasing, exclusionary practices and exclusivity--were still potential problem areas.

The agency also hopes to get a more practical understanding of the operating rules companies can use that comply with antitrust laws, DeSanti said.

The agency also hopes to learn how the changes in the industry have affected the business plans that business-to-business and business-to-consumer ventures have in place now or plan to adopt in the near future.

DeSanti said the agency is in the process of developing a transcript of the workshop, which will be posted on the Web for more feedback and for use in future decisions by the FTC in the area of antitrust law and e-commerce.

Reuters contributed to this report.