The Japanese Fair Trade Commission (JFTC) has alleged that 47 companies and eight individuals engaged in bid rigging for steel bridge construction projects ordered by the Japanese Government. Following raids on the suspected cartel members, the JFTC indicted 26 companies and eight employees for manipulating the bidding process for government steel bridge contracts in breach of the Antimonopoly Act and the Criminal Code.
The JFTC suspects that the cartel may have been operating for around 40 years, costing the government millions of yen in artificially inflated construction prices.
Government procurement provides a perfect medium for the formation of cartels because the transparency required in government contracts provides cartel members with the information required to easily allocate markets and fix prices.
In July, as part of the ACCC’s program to combat cartels, the ACCC released a Public Procurement Package to help government agencies identify and report suspicious tender practices such as bid rigging.
