The document discusses bid rigging, a form of fraud where companies collude to fix contract prices, affecting competition and consumer costs. It outlines the legal consequences for such activities across various countries, including fines and imprisonment, with specific references to laws in India, the U.S., U.K., Canada, and Indonesia. Additionally, it highlights methods to detect and prevent bid rigging to maintain market integrity.

1. BY: PARAM TANDON
BLS/LL.B 5th YEAR
Dr. D. Y. PATIL COLLEGE OF LAW
MUMBAI

2. Bid rigging is a form of fraud in which a commercial contract is
promised to one party even though for the sake of appearance several
other parties also present a bid. This form of collusion is illegal in
most countries. Bid rigging is anti-competitive because by colluding,
these bidders keep the bid amount at the
pre-determined level.

3. Bid suppression
Complementary bidding
Bid rotation
subcontracting
Market Division
Buy-Back
Phantom Bids

4. Increases the
cost to the
consumers.
Potential
wastage of
tax payer can
be significant
Pushes up
contract
prices by 20
to 30 percent

5. Eliminating
competitors
Reduction in quality
standards.
Damage the credibility
of lending institutions,
such as the World Bank

6.  Receive identical bids or close amount of number from different companies
 There is some indication of a physical alteration of bids,
particularly at the last minute
 The range of bids shows a clear gap between the winner
and all others
 All companies submit high bids when the cost for work are less on paper
 Qualified bidders do not bid especially if they initially took steps to bid
 If a contract is re-bid because all initial bids are unacceptable, the bidders
come back in the same order or some bidders fail to re-bid

7. •Develop prior information about the market
•Encourage participation in the procurement process
•Avoid predictability in tender process
•Reduce opportunities for communication among
bidders
•Provide clear evaluating and award criteria

10. THE COMPETITION ACT,
2002
IF SECTION
3(3)(d) VIOLATED
SECTION
27(b)
₹ PENALTY UPTO 10% OF
AVERAGE TURNOVER
OF 3 PRECEDING
FINANCIAL YEARS

11. Section 190 of Enterprise Act 2002:
1)A person guilty of an offence of Bid Rigging is
liable—
(a)on conviction on indictment, to imprisonment for a
term not exceeding five years or to a fine, or to both;
(b)on summary conviction, to imprisonment for a
term not exceeding six months or to a fine not
exceeding the statutory maximum, or to both.

12.  Fine up to
$10,000,000 for
corporations.
 Fine up to $350,000
and/or 3 years in
prison for individuals.
 Responsible for
restitution to victims.
 Possible civil suits for up
to 3x the amount of
damages suffered.

13. According to Indonesia’s competition law,
• The Commission can impose civil fines up to Rupiah 25
billion (US$2.7mn) for violations of the law or criminal
fines.
• up toRupiah 100 billion (US$2.3bn) and a prison term
of up to six months, as sanctions for bid rigging.

14. Participants in illegal bid
rigging are sentenced to
a maximum two-year
prison term or fined a
maximum Y2.5 million.
ANTI-MONOPOLY LAW

15. • No limit on fines
• Jail term up to 14 years for individuals(S.
47(2))
• Victims have a statutory right to sue
perpetrators to recover damages caused by
bid-rigging (s. 36)
• Criminal record may be registered with
the Canadian Police Information Centre
(CPIC)

16. Maximum 10 % of
WORLDWIDE TURNOVER
ENTERPRISE (any
entity)
PENALTIES
SECTION 4 AND 10 OFFENDERS
ENTERPRISEISE

17.  Non-compliance has serious consequences:
• Fines up to 10% of annual worldwide turnover
• Liability in damages under national law
• Voiding of contract
• Criminal liability
• Substantial expenditure of time and money
• Bad publicity
• Investigations by other competition
authorities

18. INDIA
•MONETRY FINE
•NO
IMORISONMENT
U.S.
•MONETRY FINE
•IMPRISONMENT
U.K.
•MONETRY FINE
•IMPRISONMENT,
OR BOTH
INDONESIA
•MONETRY FINE
•IMPRISONMENT
JAPAN
•MONETRY FINE
•IMPRISONMENT
CANADA
•MONETRY FINE( NO
LIMIT)
•IMPRISONMENT
•RECOVERY TO VICTIM
•CRIMINAL RECORD
MALASIA
•MONETRY FINE
• NO
IMPRISONMENT
EU
•MONETRY FINE
•CRIMINAL
LIABILITY
BID RIGGING
PENALTIES
COMPARISON
FINE