1 / 0

Alternative Means of Cartel Detection

2013 ICN Cartel Workshop Plenary I Cape Town, South Africa. Alternative Means of Cartel Detection. - Introduction of Korea’s system for detecting cartels -. 16 th Oct 2013 Dae -young Kim Director, International Cartel Division Korea Fair Trade Commission. Ⅰ . Preface.

lara
Download Presentation

Alternative Means of Cartel Detection

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 2013 ICN Cartel Workshop Plenary I Cape Town, South Africa

    Alternative Means of Cartel Detection

    - Introduction of Korea’s system for detecting cartels - 16th Oct 2013 Dae-young Kim Director, International Cartel Division Korea Fair Trade Commission
  2. Ⅰ. Preface Cartel enforcement has been the one of the foremost priorities of law enforcement of the KFTC Strong law enforcement regime against Cartels KFTC: Administrative enforcement KRW 2.018 trillion imposed since 1990 ($1.8 billion) 66.6% of total amount of surcharge imposed on competition law violation 95.8% of the cartel surcharges was imposed after 2000. Prosecutor’s Office: Criminal enforcement Private enforcement
  3. Ⅰ. Preface While cartel cases with Leniency are skyrocketing… Up-to-date effective self-detection system still necessary for Sending a signal for reinforcing deterrence of cartel Sustainable success of Leniency programme Overcoming limited resource problem
  4. Ⅰ. Preface Bid Rigging Indicator Analysis System(BRIAS) Ex officio detection Leniency Programme Cartels detection Rewarding system for reporting of cartels Identification from report
  5. Ⅱ. Bid Rigging Indicator Analysis System(BRIAS) Seriousness of Bid-Rigging in Public Sector Waste of national budget Scope of harm is far-reaching Historically deep-rooted and hard to detect Public institutions Bidding information BRIAS Figures ↑ The possibility of bid rigging ↑ Transfer Analyze Automatic/Manual Quantify
  6. Ⅱ-2. History of BRIAS 2006 : The KFTC developed BRIAS / Public Procurement Service’s bidding 2007 : Legal ground was formulated / four major public enterprises “The head of a public institution must submit the information on bidding to the KFTC when the bidding notice is announced or the winning bidding price is determined.” 2008 : Central administrative bodies, local governments and state enterprises 2013 : automatically receive the information from PPS’s foreign procurement system ☞ 5,500 bids per year are analyzed
  7. Ⅱ-3. Example of BRIAS Analysis <Analysis Results> point Analysis 1 Value Analysis 2 Value point Analysis 3 point Value Rate of Bid(%) (A) Rate of the lowest level of Bid(%) (B) A / B (%) Number of participants Number of participants Number of participants Number of participants exceeding expected price Number of participants exceeding expected price Rate of the lowest level of Bid(%) (Participants) Way of Competition Way of Competition Way of Competition Restrict on Record Restrict on Record Restrict on Record Convert to free contract No Total Points Total Points Increase the expected price No Apply Total Points
  8. Ⅱ-4. System operation mechanism <Example : Construction of Han-river Bridge> <Score by types of information> <weight by types of information> <Score X weight> ① Forms of bidding : 7 points ② Number of bidders : 8 points ③ Number of failures in bidding : 9 points ④ Contents of bidding practice : 6 points ① Forms of bidding : 1.3 ② Number of bidders : 0.7 ③ Number of failures in bidding : 1.8 ④ Contents of bidding practice : 1.9 ① Forms of bidding : 9.1 points ② Number of bidders : 5.6 points ③ Number of failures in bidding : 16.2points ④ Contents of bidding practice : 11.4points = X Total score : 42.3 points
  9. Ⅱ-5. Cases in use Construction of the Seoul subway No. 7 ⇒ quite high bid rigging indicator ⇒ surcharge of $26million Education offices’ Group insurances ⇒ quite high bid rigging indicator ⇒ surcharge of $1.7million
  10. Ⅲ. Informant Reward System Giving financial rewards to those who reported unlawful behaviors and submitted the evidence. Increasing the possibility of detecting unlawful acts causing direct and extensive damages but hard to detect There are about 50 similar reward systems in Korea.
  11. Ⅲ-2. Comparison with Leniency Program * Cartels, Prohibition of activities by trade ass’n, Discrimination for the benefit of affiliates, Unfair inducing customers, Sales by employee, Violation of Notification on large retail store, Violation of Notification on newspaper sales
  12. Ⅲ-3. Ways of scoring reward amounts Reward = first reward X Adjustment ratio 1% ⇒ A $1.8mil. + 5% ⇒ $ 67.5 thousand + $0.45mil. 10% ⇒ $ 45 thousand $0 Adjustment ratio Surcharge First reward
  13. Ⅲ-4. Rewards paid during the last 3 years
  14. Thank you for your attention!daeyoungkim@korea.kr
More Related