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Bid-rigging will be in the spotlight due to ongoing criminal prosecutions as well as new legislative powers and increasingly sophisticated enforcement tools being rolled out by Ireland’s Competition and Consumer Protection Commission (CCPC).
What is bid-rigging?
Bid-rigging is the illegal practice of collusion between businesses to fix prices or determine the winner of a tender process. This may involve businesses agreeing beforehand to submit artificially inflated bids, rotating which company will submit the winning bid, or otherwise creating the illusion of competition where there is none. Bid-rigging is considered to harm competition and increase costs for buyers. It can deter businesses from participating in tender processes which can create a negative cycle of fewer bidders, less competitive prices and ultimately a poorer and less efficient outcomes in the award of contracts.
Bid-rigging is unlawful because it involves an anticompetitive agreement or concerted practice between rival bidders contrary to Section 4 of the Competition Act 2002 (as amended), and is considered a “hard-core” cartel offence. Bid-rigging is explicitly mentioned in the Competition Act as a prohibited practice and is a specific criminal offence in Ireland in its own right (as a result of certain legislative amendments which came into effect in September 2023).
Irish bid-rigging cases
Ireland’s latest bid-rigging case is scheduled to be heard in Q1 2025. Criminal proceedings have been brought against 13 defendants who allegedly were involved in bid-rigging in the award of publicly funded school bus transport contracts in Co. Tipperary and its surrounding areas. The prosecutions follow various dawn raids first carried out by the CCPC and the Gardai in early 2017 and a subsequent investigation by the CCPC.
This is not the first time that bid-rigging offences have been prosecuted in Ireland. In 2017, a flooring company, Aston Carpets and one of its directors pleaded guilty to implementing and taking part in bid-rigging in the award of flooring contracts by various multi-nationals between 2012 and 2013. The illegal conduct involved indirectly fixing prices for the supply and fitting of floor finishes and sharing the market by over-bidding on alternating tenders. The sentence was appealed by the DPP to the Court of Criminal Appeal as it was considered unduly lenient. As a result of the appeal, the fine levied against the director was increased from €7,500 to €45,000.
In its most recent annual report, the CCPC promised that there is “more to come” in the area of bid-rigging enforcement.
Detecting bid-rigging
The CCPC (and other competition agencies) use a range of measures to uncover bid-rigging cartels. For example, the CCPC and DPP jointly operate a “Cartel Immunity Programme”, under which the first whistleblower in a cartel who admits their participation in the cartel and cooperates fully with the CCPC investigation can be granted full immunity from prosecution. The CCPC has also introduced an “Administrative Leniency Policy” which can confer full immunity from administrative fines to the first cartel member to blow the whistle on its co-conspirators (and there are also reduced fines for any subsequent whistleblowers). This is similar to the leniency policy operated by the European Commission. The objective of these programmes is to assist the CCPC in detecting cartels and gathering evidence to help the CCPC in its investigations.
The CCPC also operates a dedicated confidential whistleblower website “WhistleB” to facilitate the anonymous sharing of information and evidence about illegal cartel behaviour.
The CCPC is increasingly focused on tackling bid-rigging in public procurement. A significant proportion (approx. €20bn per year) of Government spending goes on public contracts so ensuring public contract awards are done in a fair and competitive way will continue to remain a high priority for the CCPC and the Government. According to a report published by Department of Enterprise, Trade and Employment report (2024), the CCPC has 12 full staff responsible for cartel enforcement. Further growth in enforcement personnel numbers in the CCPC is expected.
In a number of countries, competition authorities have detection tools that allow them to screen tender data to identify suspicious patterns that may indicate bid-rigging. The UK’s competition regulator, the Competition and Markets Authority has also indicated that it is currently trialling a new artificial intelligence-backed tool which scrapes large-scale data, to assist in catching companies colluding in their bids for public contracts.
In Ireland, the so-called “Hamilton review” carried out by an advisory council on economic crime and corruption, has formally recommended that a similar screening system for bid-rigging should be established in Ireland, which would be operated by the CCPC. Draft legislation is currently being developed which would allow the CCPC to screen all public procurement data to assess whether bid-bigging might be involved.
Practical tips
In light of increased scrutiny on public procurement processes, stricter enforcement measures, and more sophisticated ways to detect bid-rigging, it is crucial for businesses to understand the risks involved and take steps to ensure compliance with competition law. Some practical tips for companies bidding for contracts to mitigate a bid-rigging risk include:
If you have any questions or concerns regarding bid-rigging in your industry, consider getting in touch with a member of the ALG EU, Competition and Procurement team.
Date published: 5 February 2025
