6 speed-camera firms ordered to compensate for bid rigging

By Lee Kyung-min

A court ordered six traffic enforcement or “speed” camera manufacturers, Monday, to pay the government some 6.7 billion won ($6 million) in compensation for bid rigging.

The Seoul Central District Court said the government bought the speed cameras at inflated prices between 2005 and 2008 due to price fixing.

The biddings were commissioned by 16 regional police agencies.

The six firms are LS Industrial System, Vitzrosys, KEON-A Information Technology, TOPES, LENECO and Hitecom System.

The government filed a suit against the six after the Fair Trade Commission (FTC) fined them for collusion in 2011.

The anti-trust agency said that representatives of the six met in secret to fix the bidding price and avoid competition. The six were the only qualified bidders for speed cameras until 2009.

The FTC fined LS Industrial System 1.2 billion won; Vitzrosys, 800 million won; KEON-A Information Technology, 824 million won; TOPES, 815 million; and Hitecom System 133 million won.

LENECO was exempt from the fine because it voluntarily submitted a report about its involvement in irregularities, the FTC said.

The other five filed administrative suits to nullify the fines, but after two appeals, the Supreme Court in March of last year ordered them to pay the penalties.

“At biddings, they took turns in letting one company win that offered 97 percent of the price the government asked for. The other five bids were slightly more than that to avoid suspicion. Their action resulted in financial harm to the government,” the judge said in its ruling.

“What they did works directly against the basic principle of fair competition. They should pay the price for their crime,” the judge added.

The total damage incurred is about 11.3 billion won. However, the judge said the government should take 30 percent responsibility for failing to properly monitor the bidding process.