FTC to Review Auto Makers’ Plan for Online Purchasing

WASHINGTON —  A plan by General Motors Corp., Ford Motor Co. and DaimlerChrysler to form an online system for purchasing supplies is being scrutinized by antitrust enforcers to make sure the arrangement won’t facilitate collusion to lower purchase prices.

The Federal Trade Commission said it was reviewing plans by the world’s three biggest auto makers to form the business-to-business network on which parts suppliers would submit bids online to sell products to the auto makers.

The plan, announced last month, would be one of a growing number of business-to-business networks designed to reduce the costs of purchasing supplies and raw materials. Similar arrangements have been announced in the chemical, oil and financial services industries.

The trend will probably prompt FTC reviews of similar networks, said Washington antitrust attorney Mark Gidley. “Generally what they are doing is wildly pro-competitive because it reduces costs,” he said. “On the other hand, God is in the details.”

Gidley added, “Any business-to-business network could raise antitrust issues unless it is implemented properly.”

An official of the Original Equipment Suppliers Assn. said the review is appropriate.

“It’s a good idea that they check and satisfy themselves that there isn’t any undue competitive advantage from this,” said Neil De Koker, managing director of the association, which represents more than 200 auto parts companies. De Koker said he didn’t think the FTC inquiry was “something precipitated by suppliers.”

The FTC had conducted a preliminary inquiry, reported Wednesday by the Wall Street Journal, and Wednesday opened a formal review. Such reviews are triggered when companies submit plans for a joint venture under the Hart-Scott-Rodino Act.

On the New York Stock Exchange, GM rose $1.56 to $81.75, Ford fell $1.81 to $44 and DaimlerChrysler closed up 69 cents at $66.13.