[LINK] ACCC squibs action over on-line buying cartels

[rsedc@urgento.gse.rmit.EDU.AU]

On Thu, Nov 09, 2000 at 10:17:39AM +1100, stewart carter wrote:
> 
> the articles and excerpts you've posted from various sources serve only to 
> reinforce my point that there has been no indication that the ACCC will 
> take a different attitude to the US Federal Trade Commission over emerging 
> on-line B2B buying cartels like corProcure, Cyberlynx etc.

I sensed there was some differences in tone from both authorities,
you are perfectly alright to have different opinion.

> These cartels appear, prima-facie, to be anti-competitive, and to allow 
> large companies to collude in squeezing better prices from their smaller 
> suppliers. But like the FTC, the ACCC is sitting on its hands and doing 
> nothing, as the BRW article confirms.

FTC was approached for authorization and was in a position officially to
do something but no immediate objection was raised. There are many other
large but smaller than Covisint B2B vertical hubs already in existence
in US. Whereas for ACCC according to seperate reports from AFR, no
application for authorisation has been discussed with them from corProcure
and AusMarkets. Thus ACCC appears to be not in a position to do anything
yet. This is my speculative assertion that there are differences following
from the other assertion that Cyberlynx and corProcure are 'unique'.
There is no point discussing this seperately if you do not accept the
latter.

> Likewise the articles fail to substantiate your original claims that 
> Cyberlynx and corprocure are 'unique in the world'.

I have not seen any other sources except me asserting that the structure
of Cyberlynx and corProcure are 'unique in the world', based on large
projected turnover (wrt the respective market size) , ownership,
industry and the nature of business. In the early stage of eCom, by their
nature independent B2B hubs are relatively small compare to those set
up by existing large industry corporations. Thus the major B2B hubs
are set up by the industry corporations. I am only interested in 'large
multi-corporation consortium' B2B Hubs with projected turnover of more
than AU$1 billion from Aus or US$10 billion from US/World.  The list I
collated below does not claimed to be comprehensive but I have difficulty
in finding those that are formed by large multi-corporation consortia from
multi-industry and involved in owners' non-core business dealing
exclusively in things like stationary and office supplies. Even if they
exist, they most probably are not the norm. You are free to form your own
opinion.

Aus:
	corProcure
		- AU$8 billion
		- 14 of the large corps in Aus,
		- horizontal multi-industry
		- owners' non-core business (stationary, office supplies)
	Cyberlynx
		- large
		- 5 of the large corps in Aus,
		- horizontal multi-industry
		- owners' non-core business (stationery, supplies and electricity)

World/US:
	Covisint
		- US$80 billion + US$87 billion + ??
		- Ford, General Motors and DaimlerChrysler
		- automotive parts
		- owners' core business
	Exostar
		- US$400 billion
		- Boeing, Lockheed Martin, Raytheon, BAE Systems
		- aviation parts market
		- owners' core business
	GNX
		- US$350 billion
		- Sears Roebuck (US), Carrefour (FR), Metro (DE), etc
		- retail trade products
		- owners' core business
	Quadrem 
		- US$200 billion
		- Alcan Aluminium Limited, Alcoa Inc., Anglo American plc,
		  Barrick Gold Corp, The Broken Hill Proprietary Company Limited (BHP),
		  Compania Nacional del Cobre de Chile (CODELCO), Companhia Vale do Rio
		  Doce (CVRD), De Beers Consolidated Mines Ltd., Inco Ltd.,
		  Newmont Mining Corporation, Noranda Inc., Phelps Dodge Corporation,
		  Rio Tinto and WMC Limited
		- Mining and metals procurement
		- owners' core business
	Aeroxchange
		- large
		- Air Canada, All Nippon Airways, America West, Scandinavian and
		  Singapore Airlines. Air New Zealand, Austrian Airlines and KLM
		  Royal Dutch Airlines
		- aviation services
		- owners' core business
	WorldWide Retail Exchange
		- large
		- J C Penney (US), Delhaize (BE), Marks & Spencer (UK), Tesco (UK)
		- retail trade products
		- owners' core business
	CPGMarket
		- large
		- Nestle, Groupe Danone
		- food
		- owners' core business
	Automotive Supplier Mart  
		- large
        - Robert Bosch GmbH, INA Waelzlager Scheffler oHG
		- automotive supplier industry. 
		- owners' core business
	RubberNetwork  
		- large
		- Goodyear, Cooper, Michelin, Pirelli, Continental & Sumitomo
		- rubber and tire industries
		- owners' core business
	Worldwide Retail Exchange 
		- large
		- Target, Kmart, Safeway, Walgreen and others. 
		- food, non-food, textile and drugstore merchandise
		- owners' core business
	Elemica 
		- large
		- chemicals
		- DuPont Co., BASF AG, Dow Chemical Inc. and five others
		- owners' core business
	Envera 
		- large
		- Petroleum and chemicals
		- Albemarle Corporation, Borden Chemicals, Equistar, Ethyl Corporation,
		  Lubrizol, Lyondell Chemical , Mays Chemical, Occidental Chemical
		  Corporation and Solutia. 
		- owners' core business
	FuelQuest 
		- large
		- petroleum distribution
		- BPAmoco, Chevron, Conoco, Citgo, Shell, Texaco and others
		- owners' core business
	IngredientsNet
		- large
		- Food ingredients
		- Kraft, Heinz, Unilever and Hershey
		- owners' core business
	??
		- large
		- Kraft, Unilever and Procter & Gamble, + 50 others
		- retail trade products
		- owners' core business
	Transora 
		- large
		- Grocery and consumer products
		- Coca Cola, Eastman Kodak, General Mills, Hershey, Johnson
		  & Johnson, PepsiCo, Procter & Gamble, Seagram and others
		- owners' core business
	e2open
		- large
		- Electronics
		- Hitachi, IBM, Lucent, LG Electronics, Matsushita Electric
		  (Panasonic), Nortel Networks, Seagate, Solectron, Toshiba, Acer
		- owners' core business
	High-Tech Exchange 
		- large
		- high-tech industry
		- AMD, HP, Gateway, Compaq, Hitachi
		- owners' core business

> Sure, CommerceOne is a market-maker, and in that sense a neutral entity, 
> but its marketsite.net, like the sites operated by cyberlynx and 
> corprocure, spans across various industries.
>
> As horizontal markets, they are different from the industry-specific or 
> vertical on-line exchanges such as Covisint in the US auto industry, or 
> this weeks ausmarkets.com in the Australian banking industry.

Single owner B2B hubs have less risk of price fixing. I don't think that
marketsite.net had to seek approval from FTC. I don't think marketsite.net
is in the same league as others in terms of size. Multi-corporations
owned B2B hubs with their execs at the helm immediately have conflict of
interest situations unless the appropriate organization firewalls are
in place. You are free to assert that there is no difference between
the two.

> But they raise the same public policy issue, and the same concerns for 
> smaller-businesses in particular: namely that big businesses are ganging up 
> to screw them by forcing them to trade through proprietary on-line 
> marketplaces.

There are much more independent corporations than consortia. It is a
matter on the cost effectivness of where to put the focus. Any accidental
or intended actions by the consortia might carry different or unintended
interpretations that might need extra explanation. If you look hard enough
you can find some.


-- 
David Chia,
RMIT University