EU sets benchmark with first e-marketplace ruling

The European Commission has given the green light to B2B (business-to-business) marketplace MyAircraft.com.

In the first European ruling of its kind the commission adjudged "the operation would not give rise to competition concerns".

The ruling is widely being regarded as a precedent for the EU's attitude to online exchanges.
MyAircraft.com is a joint venture to manage supply chain, procurement and sales in the multi-billion pound Aerospace industry. It was founded in July by Honeywell, US aerospace manufacturer United Technologies Corporation (UTC) and technology provider i2.

Some commentators have raised concerns that B2B marketplaces could be anti-competitive if they allowed a cartel of major buyers to develop in a market. Mario Monti, European Competition Commissioner said earlier this year that the EC will closely monitor online exchanges to ensure they do not breach competition law.

The EC said MyAircraft bypassed these concerns because the aerospace sector already has a number of other marketplaces operating, which would provide strong competition.

Tim Frazer, partner at UK law firm Arnold and Porter, said: "This ruling has been anxiously awaited and, in the absence of any real guidelines from the EC in this area, the decision will be pored over to work out where exactly the Commission's priorities lie."

Kevin Prouty, research director for AMR agreed the deal will be seen as a benchmark for EC policy in this area. He added: "Unfortunately regulatory issues are just the first problem. Technology and participation by industry are going to be much bigger difficulties."

Andrew Moorfields, UK MD of B2B website bfinance.com welcomed the move. He said: "There is certainly a potential competition issue here - but the market is best left to deal with it. If suppliers are squeezed out by a buyer cartel then they will cease to be - which is in no one's interest."

However Mike Pullen, partner at European law firm DLA warned: "This does not mean to say the Commission is bound to clear everything - each case should be taken on its merits."

E-marketplace vendor Commerce One, although not part of the MyAircraft.com deal, still welcomed the news. A spokesman said it is "good news for the industry as a whole".