Brussels to probe car sites

Brussels is set to investigate whether an internet exchange set up by the world's three largest carmakers breaks European competition rules.

Brussels is set to investigate whether an internet exchange set up by the world's three largest carmakers breaks European competition rules.

Over the last month the Competition Commission has been quietly monitoring the plethora of new internet procurement exchanges and it is now keen to take action.

A commission spokeswoman said: "There is a risk that some exchanges could turn into a cartel if the buyers get together and set the prices. Don't forget that here in the commission a cartel is a cardinal sin."

The source said that the commission wants the backers of Covisint, a car parts procurement exchange, to register its proposals with the commission so it can it can determine if it is in line with competition policy.

The exchange, which was set up General Motors, Ford, DaimlerChrysler and Renault-Nissan, is already being probed by the US Department of Justice (DoJ).

"The three companies have not yet notified us. But the creation of the exchange will almost certainly fall under the EU merger rules, so we expect to hear from them soon," said the source.

The first exchange likely to undergo the rigorous scrutiny of the commission is one operated by Honeywell and UTC for the airline industry. The Competition Commission, headed by Mario Monti, will decide on 7 August if a full probe is needed.

Brussels and the DoJ are not the only authorities taking a keen interest in the exchanges. In Britain, the Office of Fair Trading has commissioned research into the impact of e-commerce on competition. Meanwhile, America's Federal Trade Commission earlier this month fired a warning shot to the backers of the new procurement sites, saying breaches of competition policy would be taken seriously.