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Opinion

The OPEC of meat

Federal agencies are investigating online exchanges to keep them on the straight and narrow

By Kevin Fogarty
May 30, 2000 12:00 PM ET

Computerworld - It's already hard to convert a brick-and-mortar company to a bricks-and-clicks hybrid, and the government is trying to make it even harder. And you know what? I hope it succeeds.
For instance, last week the online ticket service
that the major airlines are putting together became the target of investigations by the Justice Department and the Senate, and it's not even supposed to launch until sometime this summer.
People at the DOJ and Senate are worried the new business model will be anticompetitive because it cuts travel agents out of the loop.
The FTC and the DOJ are also running informal antitrust investigations of business-to-business exchanges under development by the Big Three automakers. A Ford spokesperson said the three have slowed development of the project until the investigation is complete.
The FTC is also pushing for more stringent privacy regulations, which would not only restrict how data on Web customers is handled, but would also impose rules that make handling the data more complex and impose penalties for even accidental violations.
And in Minnesota, a state representative is trying to get U.S. uber-antitrust warrior Joel Klein to take time off from the Microsoft case to investigate a food processing exchange he calls "the OPEC of meat" - a cartel of six of the largest food-processing companies - that the rep believes will cheat farmers. (Although, to tell the truth, "OPEC of meat" has become my favorite phrase. I'm thinking of having T-shirts made up.) You can't launch a cartel anymore without drawing fire.
And that's great. The Internet has a reputation of being the Wild West - untamed and untamable. The problem is that outlaws are the only people who want to live in a place where there are no laws.
But most of the players are hardly monopolistic predators. (I mean, come on - Ford?) They're just operating in an area in which normal standards of behavior have not yet been defined.
You can't do much business without definite rules, even if you're starting out as the one in a monopoly position. Because if you can take advantage of suppliers in one context, buyers will be able to do the same to you in another.
And if there are no rules about privacy, any trust that you believe your customers have in you is complete fiction. A relationship in which one party promises not to take advantage, but has the power to do so, isn't a healthy one.
An FTC survey found that only 42% of the top 100



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