Bid rigging and its Regulation by Criminal Law

Despite many regulations of the criminal law and other laws which punish cartels and bid-rigging, the cartels among the corporations is continuing in Korea. Nowadays the big construction companies like Hyundai, Samsung, Daewoo, LG, Daerim etc. have been participating in bid rigging in the many big construction project such Honam bullet train rail construction, 4 major river reshape project besides small companies. Sometimes bid rigging has been conducted to reduce a cutthroat competition, but the structural factors in market aggravates bid rigging and cartels such as the unreasonable bidding system, prison’s dilemma in market. The bid rigging has been conducted very secretly, so it is not easy to detect and to enforcement. Furthermore, the participants of bid rigging disturb the non-participants's business. And there are many side effects such as deterioration of goods and building, decrease of trust to bid fairness, avoidance to improve the competitiveness etc. Therefore, this study aims to detect the cause and patterns of bid rigging and to review the regulations on cartels and bid rigging in many developed countries such as the United States, Germany and Japan. And we reviews many rulings on bid rigging made by Korea Supreme Court, to articulate the problems of those rulings and finally to suggest some remedies to regulate bid rigging and cartels. Finally, I suggest that in regulating the bid-rigging the criminal law is not a suitable measure, because the criminal enforcement agency such as the police, the prosecutor don’t know well cause and patterns of bid-rigging. Also, there are much vagueness and unclearness in criminal clause on the bid-rigging such as the ‘hurting the fairness of bid, auction’. So I suggest that the Anti-trust Law should be the prima-facies in regulating bid-rigging, and the criminal law is the ultima ratio to punish the most harmful bid-rigging which is not insufficient by regulating the Anti-trust Law.