July 3, 2002 -- The European Commission has authorized the creation by Group Suez's subsidiary Ondeo and RWE's Thames Water of an online electronic exchange for the water industry.
The provisionally called Water Portal will enable companies in water-related industries to reduce their procurement costs, namely by calling in bids from a wide range of suppliers.
The Water Portal is a new entrant and will face competition from other water-related market places as well as from traditional procurement methods.
Ondeo is a wholly-owned subsidiary of the French Group Suez Lyonnaise des Eaux, active in the fields of water services and wastewater treatment. Thames Water constitutes the water division of the German group RWE. Thames Water is mainly present in the UK and is active in the fields of water and wastewater services.
Together, they have proposed to create a "Water Portal" to offer services including electronic procurement, information and bid management services to companies active in water-related sectors.
Electronic exchanges are usually pro-competitive as they can improve the efficiency of the procurement channels. However, they can also present competition problems if they have the effect of shutting smaller players out of the market (the so-called exclusionary effects), if they tie their members exclusively to the platforms and if they are used to exchange sensitive information.
The commission has examined the conditions of access to Water Portal and has concluded that it provides adequate safeguards to avoid any exchange or disclosure of confidential information between competitors. Full and open access of suppliers and buyers to the exchange will be guaranteed and there will be no exclusivity provisions.
