Bid-rigging is a pretty boring crime because, like a lot of economic crimes, it is so close to being just fine. If I see a deep-pocketed competitor trying to buy a thing that I also covet, I may decide to spend my time elsewhere rather than bid against them and risk ending up with an expensive thing and a winner’s curse. That’s fine! But if I talk to them about it first, or even worse if I say I’ll hold off on bidding in exchange for them doing the same on the next deal, it’s not fine. You can see why there’d be a difference but it’s not a matter of life and death or anything, it’s just behavior (not bidding on things that are too competitive) that we are willing to tolerate but that we don’t want to encourage with too much conniving about it.

Since it’s kinda boring it tends to get juiced up rhetorically. Enter Harry First:

“The famous phrase is a ‘smoking gun.’ That’s a smoking H-bomb,” said Harry First, a former antitrust lawyer for the Department of Justice. “When the talk is explicitly about getting together to avoid bidding each other up, it’s a red flag for collusion, bid-rigging, market allocation.”

When the talk is explicitly about market allocation, BOOM SMOKING H-BOMB.* Anyway that thermonuclear talk came of course from today’s, really every day’s, miscreants, the good folks at Chesapeake Energy, who Reuters reports were maybe talking with their competitors at EnCana about maybe splitting up the bidding on Collingwood shale leases in Michigan, which would be bad. Read more »