Control of B2B E-Commerce and the Impact on Industry Structure

Abstract

A significant amount has been written concerning the transaction costs associated with B2B e-commerce. We take an alternative approach and explore the impact of increased use of B2B e-commerce on the structure and competitiveness of downstream industry activities. We argue that the openness of an industry's B2B e-commerce systems will have a direct effect on the structure of downstream industry activities. Industries where the B2B e-commerce systems are largely open to participation should experience increased heterogeneity and competition in downstream industry activities. Industries where the B2B e-commerce systems are largely closed should experience increased homogeneity and decreased competition in downstream industry activities. We further argue that the openness of the B2B systems will depend on the type of B2B systems that develops within a specific industry. Correspondingly, much attention should be given to the type of B2B e-commerce systems that emerge.