The Korean government has launched a probe into the conduct of the countryÆs top five PC makers, following allegations that they colluded in bidding for government procurement contracts to keep prices up. Samsung Electronics, LG Electronics, Daewoo Telecom, TriGem Computers and Hyundai Electronics Industries (HEI) are said to have reaped huge profits by allegedly colluding in their bids to the government Supply Administration for administrative network PCs, the Fair Trade Commission said in a statement.
The commission said its preliminary review of documents handed over by the Supply Administration showed that companies which tendered bids for Pentium II PCs secured contracts by offering bids at an average of 99% of the estimated price.
HEI obtained a contract to supply 3,000 units, while the remaining four PC manufacturers were awarded 30,000 units each. The five companies together recorded 359.1bn won ($312m) in sales as a result of the successful bids.
For five companies to have offered bids at about 99% of the estimated price and to receive orders for the same quantities, they must have acted in concert, said a commission official. He added that if collusion is confirmed, the companies will be punished severely according to the law.
The average bid price for government supplies is about 89% of the estimated price and in construction projects a bid price of more than 90% strongly suggests bid collusion, according to the official.
