Prohibition of unreasonable restraint of trade (Bid-rigging)
Bid-rigging means restricting competition in bids for public works and the public procurement of goods of the national and local governments. The companies participating in a bid talk to each other before the bid and decide on each bid price and a company winning the bid.
As you can see in the above illustration, if Companies A, B and C talked to one another before a bid and decided that Company C would win the bid, there would be no competition. As a result, the accepted bid price would be higher than it should be.
If there was fair competition among the companies, the contract could have been made at a lower price. For this reason, bid-rigging is prohibited as an unreasonable restraint of trade.
In nature, bidding is designed to ensure strictly fair competition, while bid-rigging causes a waste of tax money and leads an extremely corrupt act that is damaging to public benefits.
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