Ict, e-business and Small and Medium Enterprises

Competition issues 

Ensuring competition and entry opportunities for other market players, particularly smaller ones, 

is an ongoing policy priority. The open architecture of the Internet does not necessarily result in more open 

markets, because e-commerce among businesses is usually initiated by dominant companies in value 

chains. E-business and Internet strategies appear to be reinforcing market structures and the role of these 

companies. The EBIP study indicates that large companies with the most bargaining power in the supply 

chain tend to lead the establishment of B2B e-commerce, while other firms, including small ones, react to 

such initiatives (OECD, 2002a). 

While Internet commerce provides SMEs with opportunities to participate in new supply chains 

and markets, they may compete and conflict with established channels and established market structures. 

There may be explicit or implicit pressures from leading firms to maintain existing channel structures and 

networks or to refrain from participating in new channels. 

Competition authorities need to monitor possible anti-competitive behaviour as the electronic 

marketplace evolves. Technological factors also come into play. In some sectors, SMEs need to adopt 

specific e-business practices to become part of supply chains (e.g. automobile manufacturing). This 

highlights the importance of technology neutrality and interoperability (open platforms) as policy 

principles to encourage a level playing field in terms of market structure. Open source software has been 

proposed as one means of reducing anti-competitive pressures. It may be easier for small firms to have 

relationships with larger firms at lower cost if open source fosters wider compatibility between different 

applications and operating systems and lowers the cost of ICT adoption.  

Most competition authorities in OECD countries, independently or in co-operation with others in 

different jurisdictions, have examined how on-line markets, both B2B and B2C, may facilitate collusion 

and the exercise of buyer/supplier power and whether traditional antitrust tools are sufficient to address 

these issues. There has been a policy focus on small players that may be in a weaker position in relation to 

larger dominant suppliers and customers that could exercise anti-competitive pressures and lock-in..