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Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.  The Sherman Act prohibits any agreement among competitors to fix prices, rig bids, or engage in other anticompetitive activity.  Violation of the Sherman Act is a felony punishable by, for corporations, a fine of up to $100
million, and for individuals, a fine of up to $1 million or 10 years’ imprisonment (or both).

Bid-Rigging is an arrangement to predetermine who will win business contracts.  There are two types of Bid-Rigging:

  • Bid Suppression
  • Complementary Bidding

Bid Suppression is when two competitors usually bid for a contract.  The competitors then agree that on a specific bid, one of them will refrain from bidding to guarantee the contract for the other company.

Complementary Bidding is when competitors put in bids like they normally would, but the bids are overpriced or have other strings attached that make them unacceptable and get immediately declined.  The agreed-in-advance competitor then wins the bid due to lack of competition.

Bid-Rigging is basically a way for businesses to get more profit out of the entity that is creating the bid. Instead of two companies driving prices down by both bidding low for a contract, instead, the companies alternate bids that are higher, securing higher profits for both of them in the long run.

Price Fixing, Bid Rigging, and Market Allocation Schemes. An Antitrust Primer

Learn More About Bid-Rigging Laws From Chicago’s Leading Anti-Trust Lawyer

Bid Rigging can cause businesses huge losses and negatively impact the livelihood of the owners of those businesses. The businesses themselves can even fail due to the increased prices caused by the bid-rigging.

On top of the implications for businesses, Bid-Rigging also has huge impacts on the consumers themselves. Bid-Rigging causes contracts to cost substantially more for businesses, which in turn reduces their profit margins on projects. This can cause them to increase prices on goods and services in order to make up for the reduction in profit margin.  In the end, this costs consumers more for the same goods and services.

As one of the most common violations of antitrust laws, anyone can fall prey to a charge Bid-Rigging. If you have been charged or are being investigated for a Bid-Rigging violation, call Attorney Michael J. Petro at 312-913-1111 to get the antitrust legal service you need.

Experienced  Federal Anti-Trust Lawyer  – Best Bid-Rigging Federal Attorney