This paper seeks to examine specific and previously understated potential antitrust implications of electronic business-to-business exchanges. It analyzes the emergence of electronic commerce within the automotive industry, and the establishment of Covisint in particular: a joint Internet venture between General Motors, Ford and DaimlerChrysler. Covisint purports to provide a much-needed panacea for auto supply-side inefficiencies, whilst entailing the concomitant risk of market omnipotence both online and offline. This paper reviews the likely pro-competitive gains from Covisint as opposed to alternative means of distribution between automotive producers. Then, within the market for B2Bs, it intends to highlight the potential problems for inter alia innovation and entry arising from the likely 'network effects' peculiar to such an industry-wide exchange. Finally, the paper applies the doctrine of proportionality to Covisint and concludes that alternative modes are not conclusively preferable for the development of automotive B2B competition. The teaching from this case study is that antitrust should be sensitive to the underlying characteristics of B2Bs, dynamic inter-network rivalry and particular ongoing attention should be given to the way Covisint is utilized.

Antitrust Implications of B2Bs: Covisint - A Competitive Collaboration? [PDF 170K]