"Serving as Sham Bidders Prevents Failed Tenders" ... 200 Million Won Fine for "20-Year Collusion" in Semiconductor Design Software Bids

Nine companies, including family-run firms, colluded in 95 bids
Aimed to prevent prices from falling after failed bids... "Cannot be justified"

Companies that had systematically colluded for as long as 20 years were caught in bids for electronic design automation (EDA) software commissioned by major public research institutions, including the Electronics and Telecommunications Research Institute.

On November 15, the Korea Fair Trade Commission said it had ordered corrective measures and imposed fines totaling 206 million won on nine companies that rigged 95 bids between February 2005 and October 2025 by deciding in advance who would win and who would serve as a sham bidder, and manipulating their bid prices. The companies were Dahan Tech, Celloco, Soar Solution, ITN, L-Tech, ED&C, EDMC, EDMFG, and Comtech System.

The case stemmed from an industry ploy to prevent supply prices from falling when bids failed. The domestic EDA software market has high barriers to entry and is mainly supplied through distributors or agents for overseas products. Companies feared that when a procurement notice attracted only one bidder and the tender failed, the final contract price would be lower after the process switched to a negotiated contract. They therefore conspired to engage in unlawful collusive conduct.

In particular, the three companies ED&C, EDMC, and EDMFG, whose shares were divided among their representatives and family members, brazenly operated as a single business in practice through one shared business support team. In bids involving only these three companies, they selected the winner among themselves based on each company’s circumstances, with the others acting as sham bidders. In bids that included other companies, the company handling the main product was designated as the prospective winner, after which the companies shared bid prices by email and systematically carried out their agreement.

As a result of this prolonged collusion, the nine companies swept 91 of the 95 bids, with the associated contract value reaching approximately 6.2 billion won. The Korea Fair Trade Commission said, "Rigging winning bid prices under the pretext of preventing failed tenders and draining the budgets of public procurement agencies can never be justified." It added, "As the minimum fines for bid rigging have recently been raised substantially, we will respond firmly, in accordance with a zero-tolerance principle, to similar violations in key industries such as semiconductors."

This content was produced with the assistance of AI translation services.