Fair Trade Commission Imposes 9 Billion KRW Fine for Bid Rigging in Public Institution Supply Purchases

[Asia Economy Sejong=Reporter Dongwoo Lee] The Korea Fair Trade Commission (KFTC) has decided to impose corrective orders and fines totaling 8.892 billion KRW on three companies, including Jeil Pibok Gongup, for colluding in public institution supply goods procurement bids.

According to the KFTC on the 13th, a total of six businesses?Jeil Pibok Gongup, Hanil Pibok Gongup, Samhan Seomyu, and others?agreed in advance on the winning bidders and bid prices in 272 supply goods procurement bids conducted by the Defense Acquisition Program Administration or the Public Procurement Service from June 2012 to March 2017, and executed these agreements. Among the businesses involved in this collusion, three individual businesses?Daegwangsa, Hanilsangsa, and Kodea?were closed due to reasons such as business closure and thus the cases against them were terminated.

Operating internally as a single organization, the six businesses agreed to participate in bids under their respective names and colluded by setting bid prices with differences ranging from 0.1% to 0.3% to maximize the probability of winning the bids.

These six businesses, collectively known as the "Hanil Group," externally appeared as competitors in the bids but internally operated as one organization. As a result of participating in a total of 272 bids according to their agreement, they won 150 bids and signed contracts.

The KFTC decided to impose corrective orders and fines on Jeil Pibok Gongup, Hanil Pibok Gongup, and Samhan Seomyu, excluding the three companies that have closed.

The KFTC expects that this action, by detecting and sanctioning the long-term (2012?2017) secret bid-rigging activities in the supply goods procurement market ordered by public institutions such as the Defense Acquisition Program Administration and the Public Procurement Service, will help establish competitive order in future related bids and contribute to reducing national budget expenditures.

The KFTC stated, "We will continue to closely monitor public bids to prevent collusion, and if signs of collusion are detected, we plan to take strict measures through prompt investigations."

This content was produced with the assistance of AI translation services.