Their Implications for Competition Law
Edited by Michal S. Gal, Mor Bakhoum, Josef Drexl, Eleanor M. Fox and David J. Gerber
Chapter 8: Bid rigging and its interface with corruption
While bid rigging is by no means the only interface between anti-competitive conduct and corrupt conduct, it is, as befits per se prohibited anti-competitive conduct, arguably the most unequivocal and costly interface. When I use the term ‘bid rigging’ I refer to a private horizontal agreement between competitors designed to determine the outcome of a putatively atomised, individualised bidding process. The agreement may cover price, market and/or customer allocation and the identity of the winner of the bid, and frequently also the payback to the losers. This is bid rigging in its normal antitrust meaning and which most competition statutes prohibit per se along with other price and market allocation agreements. Notionally competing suppliers are not competing on the merits, they are not offering the lowest priced, best quality goods and services that they are capable of supplying. They are rather putting in an offer that is the product of a clandestine agreement amongst themselves, an agreement that by its very nature will include not only the agreed, supra-competitive winning price but also the identity of the winner and, naturally, of the losers. I distinguish this from ‘bid corruption’ which is the solicitation by, or offer to, a public official of something of value in order to influence the outcome of a bid.
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