Saturday, July 10, 2010

3-corner model – a problem on our hand

The report of the Expert Group on e-Invoicing only mild-mannerly pointed out that the 3-corner model can limit choices of suppliers and thus be anticompetitive. The view was that the market will for natural reasons become a normal 4-corner one – allowing any buyer and any seller to use their chosen service providers freely (as long as these live up to security and general content standards.  The model that a buyer should be in a position to force suppliers to choose his own partner – and thus make them prisoners in walled gardens was not considered a threat.

This has unfortunately so far turned out to be too much of wishful thinking. There are islands of 4-corner roaming (interoperability) – but some large operators are limiting and it appears even cutting down on interoperability. Enraged suppliers are doing what they can – but this situation should quickly be taken care of – hopefully by the market participants - ahead of the EU commission kicking the e-Invoicing back in play.

As said before – we now have two legs – harmonization with the VAT-directive and a global standard (ISO20022 based on UNCEFACT CIIv2 in September. Ready to walk – once we have the body – the network of service providers. It would be outrageous if very short term self-interest slowing down interoperability would prevent the utilization of the massive work done by the EU commission, national governments and standardization bodies.

Everyone should understand that market take-up will be order of magnitude faster with the so-naturally-needed just-like-payments or just-like-telecom interoperability. It is thus a win-win – but also a question of acting responsibly in the interest of society at large. If market participants fail to take this attitude the risk is obviously that there will be regulation – which seldom is leading to level-playfield competition.

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