Thursday, October 10, 2013
Separate Economic Rationale in Certain Bid-Rigging Schemes Involving Offer Withdrawal—A Critique of Polish Bid-Rigging Cases
ABSTRACT: In the following paper I will briefly analyze all of the cases decided after the entry into force of the new Polish Competition Act (i.e. 2007) until October 2012 in which the Polish Office of Competition and Consumer Protection ("the Competition Authority") invoked Article 6.1.7 of the Polish Competition Act (the provision that specifically addresses bid-rigging). I will argue that all of those cases followed a very similar pattern of behavior which I will refer to as "the Polish bid-rigging strategy" or "the Polish bid-rigging."After describing this pattern, I will examine the Polish bid-rigging strategy in the light of the single economic entity theory. I will also conduct a simplified illustrative economic analysis that will show when participation in the Polish bid-rigging strategy might have an independent economic rationale for the bidders and what needs to be proven by competition authorities in order to demonstrate such a separate economic rationale. At the end, I will argue that in three (and to some extent even in four) of the Polish bid-rigging cases the Polish Competition Authority lacked substantial competence to punish entrepreneurs for their alleged anticompetitive agreement.