Nowadays joint-bidding through establishing consortium tends to be a popular and competitive way to win a public as well as private bid. Governmental regulation regarding joint contract operation has requested a participant in a public bid to make a j...
Nowadays joint-bidding through establishing consortium tends to be a popular and competitive way to win a public as well as private bid. Governmental regulation regarding joint contract operation has requested a participant in a public bid to make a joint-bidding with a local company since 1994. In light of the situations in public bids, several constructing companies respectively made consortium with competitors as well as local companies and participated in public bids for each sector under Seoul subway line number 7 expansion project, thereby winning all the bids. Prosectors` Office indicted the companies and their executive personnels with charge of unfair collaborative behaviors or cartelistic practices violationg art.19(1) of Monopoly Restraint and Fair Trade Practices Act. However, the Supreme Court of Korea repelled the decision of Seoul Central District court which convicted defendants of the charges, by holding that there were insufficient evidence indicating restricting of competition such as probability or actual increase of winning price. This thesis analyzes the Supreme Court decision, followed by study of diverse aspects and legal characteristics of consortium in public bids. Then, it examines decisions of competition authorities and courts of Frence, the United States, and Japan regarding application of competition law to consortium in bids. It argues that decision considering consortium even with competitor illegal should not be based on per se illegal, proper to hard core cartel, but on rule of reason approach with sufficient economic evidence.