Ducking the Feds

By Kim S. Nash

June 5, 2000 12:00 PM ET

Computerworld - Now that mortal enemies are pledging to work together through Internet exchanges, the potential for them to act anticompetitively is ripe.
Yet popular vendors of e-market software, such as Oracle, Ariba Inc. and Commerce One Inc., haven't built any functions into their products to guard against antitrust problems, says Mark Plotkin, an antitrust lawyer at Covington & Burling.
"This wasn't on their radar screen when they developed the software," he says.
But IT managers can configure and customize exchange software to help avoid having federal enforcers swoop in.
To protect against unintentional cooperation in setting prices, Plotkin and other experts recommend generating code names or numbers to disguise members' identities during the bidding process. Also, don't forget to shield from public view other identifying data, such as location of the bidder or origin or destination of the product being bought.
For instance, if your big agricultural competitor is in Austin and you see that 1 million bushels of apples are coming from Austin after a request for proposal, the math is pretty easy to do.
To ensure that all exchange members get equal access to potential business, experts also suggest posting bids immediately to let other bidders react quickly. That way, they are less likely to claim they were shut out of a potential deal.
To avoid the appearance of collusion, chat rooms should be monitored. This is tough because even innocent conversation can spark antitrust trouble, Plotkin says. IT organizations for exchanges should also create and post automated reminders of what is acceptable chat and what isn't, he says.
Plotkin gives an example: "Imagine the Vermont dairy farmers. Someone posts, 'I was the one who supplied milk to Ben and Jerry's, at 67 cents per gallon. I'm pretty sure we can get at least 75 cents if we all agree.' That's inappropriate," he says. - Kim S. Nash

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