▲ Korea Fair Trade Commission
Cooperatives and companies involved in collusive bidding for corrugated plastic pipes used to protect power cables over a period of more than five years have faced disciplinary action.
The Korea Fair Trade Commission (KFTC) announced that it has issued corrective orders and imposed a total of 886 million won in fines on 3 cooperatives and 7 businesses for conspiring in advance on winning bidders and allocation ratios for corrugated pipe procurement tenders issued by Korea Electric Power Corporation (KEPCO).
The three cooperatives are the Korea Synthetic Resin Corrugated Pipe Business Cooperative, the Korea Plastic Technology Research Business Cooperative, and the Korea PE Pipe Industry Cooperative.
Investigations revealed that they entered corrugated pipe procurement bids on behalf of their member companies with the consent of those members, and subsequently distributed the won contracts among the members.
The seven businesses are Youngjin Industry Co., Ltd., P&I Co., Ltd., Sejin Engineering Co., Ltd., Shinho Co., Ltd., Green Autotech Co., Ltd., Cob International Co., Ltd., and Ohjoo Industrial Co., Ltd.
These companies are affiliated with the Corrugated Pipe Cooperative and participated in the bidding either under the cooperative's name or their own names.
It was found that the Corrugated Pipe Cooperative and the Plastic Cooperative agreed in advance on the bidding order for a total of 384 nationwide tenders for circular corrugated pipes from June 2018 to January 2023, and proceeded with the bids according to that agreement.
As a result, the Corrugated Pipe Cooperative won 204 contracts, and the Plastic Cooperative won 175 contracts.
Regarding regional-limited tenders for spiral corrugated pipes, the three cooperatives agreed to distribute contract volumes in proportion to the number of members in each cooperative across 10 tenders held from November 2017 to December 2022.
It was shown that all 10 tenders distributed volumes closely matching the agreed ratios.
Seven member companies belonging to the Corrugated Pipe Cooperative did not spearhead the joint conduct, but were found to have acted as token bidders on behalf of the cooperative in nationwide circular corrugated pipe tenders while fully aware of the collusion among the cooperatives.
In fact, investigations showed that when bidding personnel at the Corrugated Pipe Cooperative were unable to participate due to unavoidable reasons such as vacations, they contacted individual member companies and asked them to submit bids in accordance with the prearranged winning sequence.
The KFTC determined that the concerted practices of the 3 cooperatives and 7 businesses constituted violations of the Fair Trade Act.
However, the KFTC explained that the three cooperatives that led the collusion collected only 2 percent of the contract amounts as commissions, meaning the scale of their illicit gains was small, which was factored into the determination of the fines.
This action stems from an ex officio investigation and sanction initiated after detecting signs of collusion through the Bid Rigging Indicator Analysis System (BRIAS) operated by the KFTC.
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