Once operational, the big OEMs could have an opportunity to share information not only on their purchases but the purchases being made throughout their supply chains. Arent Fox in Washington, D.C. and chair of the American Bar Association s Internet committee of the section of antitrust law. By viewing into tier two and tier three, the companies will gain more transparency and the tier-one suppliers are going to be second guessed all along the road. It s pretty nasty. The free flow of information in markets has always been considered to be a good thing and the maxim has been that the more information that exists in a market, the better it operates.
Monopsony is suddenly a word that is on lawyers lips.
The exchanges provide a great opportunity to do that. The companies creating the exchanges are fully aware of the antitrust implications and have lawyers on staff to make sure they are structured in such a way that regulators don t disrupt their operation. But if suppliers are not comfortable with the exchanges, they need to let the government know about their concerns, because they will get a much better hearing from regulators than they will from the courts. The courts typically look at information exchanges as being innocuous, so it will be more of an uphill battle to fight it in the courts as opposed to going to the agencies and complaining. The courts will be inclined to view legal action from suppliers as acts of desperation by companies incapable of modernizing their business and manufacturing processes and being able to compete in the new world order.