Hello, I am Attorney Eom Sang-yun from Cheongchul Law Firm.
Today, we will learn about the crime of bid rigging.
[Question]
I discussed bid prices only with the representative of a competitor regarding public institution bids, but did not execute the discussions as agreed. Does that mean the crime of bid rigging is established in this case?
[Answer]
Even if an agreement to participate in collusion was reached but bids were placed differently from the agreement, the crime of bid rigging can still be established.
The precedent states that the crime of bid rigging falls under the prejudicial category and does not require the unjust outcome to manifest realistically. Bid rigging actions encompass not only determining prices but also actions that hamper lawful and fair competition methods (2002Do3924).
If a specific company agreed to win a bid and some bidders did not follow the original agreement and placed a lower bid than the intended company, it constitutes an act that interferes with lawful and fair competition because they won the bid using the collusion. Therefore, even if one did not follow the agreement, the act of participating in the collusion itself can establish the crime of bid rigging (209No4076).
Supreme Court Decision 2010. 10. 14, 2010Do4940 ① The defendant is the CEO of Company 1, and Companies 2 and 3 are represented by their respective CEOs, while Companies 4 and 5 are represented by their respective CEOs, and Company 6 is a director of Company 7, which has manufactured and sold audio guiding devices for the visually impaired. ② The defendant, along with Companies 2, 4, and 6, discussed collusion where Company 3 would win the bid regarding this case and pay each of the remaining three companies 10 million won, agreeing to win sequentially from the next bid, but the defendant refused, leading to no agreement. ③ However, the day before the bid, on August 22, 2005, the defendant's phone call to Company 6 triggered a series of phone calls between Company 6, 2, and 4, leading to discussions of collusion again. ④ On the bid day, August 23, 2005, phone calls continued among the defendant, Companies 2, 4, and 6, particularly concerning the bid amount, where Company 4 specifically received a request from Company 2 to ensure that the remaining three companies excluding Company 3 bid at least 100 million won, and contacted the defendant requesting to bid at “over 100 million won.” ⑤ Accordingly, regarding the bid amounts, Company 3 bid 99.7 million won, Company 7 bid 110.77 million won, and Company 5 bid 106 million won, with Company 1 bidding last at 92 million won. ⑥ If the defendant ultimately rejected the collusion during the phone conversation with Company 4 as claimed, it would not make sense for Company 4 to have them bid according to the collusion without informing Company 2 of that fact. Considering these circumstances, it was judged that the defendant engaged in collusion regarding the bid with Companies 2, 4, and 6 as stated in the case facts. (…) The recognition and judgment in the original trial are reasonable and understandable. Meanwhile, even if the defendant did not follow the initial agreement and bid lower than Company 3 to win the bid, their actions still fall under the crime of bid rigging according to the aforementioned legal principles. Thus, the original trial's judgment of guilty on the allegations of this case is justifiable. |
Therefore, in collusion cases, one must decide whether to argue sentencing based on the existence of the agreement and the failure to execute it or to dispute the establishment of the agreement itself. It should be noted that collusion includes not only explicit agreements but also implicit ones, and is recognized more broadly than contractual agreements, meaning bids can be established even without a corresponding meeting of the parties' intentions to the extent that a contract would be established.
While participating in an agreement related to collusion, one can be punished not only for bid rigging but also for violations of the 'Monopoly Regulation and Fair Trade Act' (Fair Trade Law).
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