Remarks at B2B Electronic Marketplace Workshop

Robert Pitofsky

June 29, 2000

I am delighted to have the opportunity to welcome you to the FTC's workshop on Competition Policy in the World of B2B Electronic Marketplaces.

During the next two days we will bring together over 60 industry leaders, antitrust practitioners, academics and consumer representatives to share information and address questions about B2B electronic marketplaces. These sessions are certainly topical -- hardly a day goes by without announcement of new plans for a major B2B electronic marketplace. In this instance if we haven't positioned ourselves ahead of the curve, I think I can safely say we are at least well within sight of it.

We view this workshop as an important opportunity to advance the state of understanding of B2B electronic marketplaces. We know that there is potential for tremendous efficiency in these arrangements, and we'll be devoting considerable time to better understanding the sources and magnitudes of those benefits. We also know that in theory some of these marketplaces could give rise to antitrust concerns as well. We expect that this workshop will provide insights into ways of fostering development of the new marketplaces and achieving their efficiencies in a manner consistent with maintaining competition.

This workshop is not an effort to seek out law enforcement targets. Rather, it continues a tradition reflective of the FTC's unique role: to study competition and work with the business community and others to detect new trends.

• When established in 1914, sponsors asserted that one purpose of the Commission would be to gather accurate information about industry sectors and the nature of competition.

• Some of the FTC's most far-reaching accomplishments derive from this fact-finding function. A study of the radio broadcasting industry led to passage of a forerunner of the Federal Communications Act of 1934. More recently, in 1995, the Commission held hearings on global and innovation-based competition, which have already led to revisions to the treatment of efficiencies under the Horizontal Merger Guidelines and issuance of a new set of Antitrust Guidelines for Collaborations among Competitors.

One portion of the 1995 hearings dealt with emerging electronic commerce issues, with an emphasis on consumer protection. We return today to electronic commerce issues, this time from the perspective of maintaining competition. There are a multitude of B2B electronic marketplaces, some in operation and many in the planning stage. Some work within one industry, and some operate across industries. They use a wide variety of mechanisms and structures.

Because of this diversity we have structured this workshop to facilitate discussion from a variety of perspectives -- that of the buyers, the suppliers, and the owners and operators of marketplaces themselves. The first panel will address how B2B electronic marketplaces work; then each of the next three panels will examine B2B electronic marketplace issues from one of those perspectives -- seller, buyer, and owner/operator. Next, a fifth panel will concentrate on likely future developments, and a final panel will focus directly on competition policy implications.

We have an ambitious program for the next two days and an outstanding roster of participants. I commend the participants for contributing their time and, often, traveling some distance to share their experience. I look forward to an enlightening two days.

Now I'd like to turn over the podium to Susan DeSanti, the Director of Policy Planning and one of the driving forces behind this workshop.