A group of people working together to keep the prices artificially low (or artificially high, depending on the scenario) by agreeing not to outbid each other. It's a form of collusion that's generally considered fraud.
Say a construction contract is up for bid. You and your buddy are the main competition for the project. But instead of putting in truly competitive bids, you guys get together and decide that you're going to put in the same amount. This way, whichever one of you gets the final bid, that person is going to make more than if the bidding was fair.
In this example, you and your friend are the bidding ring, and what you've just conspired to do is called bid rigging (See: Bid Rigging). We expect you to go to your room and think about what you've hypothetically done.
Related or Semi-related Video
Finance: What are Kickbacks?1 Views
Finance allah shmoop What are kickbacks He okay Okay It's
Not that it's This dark worf at midnight A car
with no place The nervous guy in the suit He's
thie it or information technology Head buyer for the bank
shmoop nar go he's the decision maker on buying three
billion dollars worth of database software And then there's this
guy just out of the car He's the head of
sales of del fi databases are us He'll make a
three percent or ten million dollar commission on this ten
year contract If it goes through all it takes is
this little bit of wd forty to make the wheels
turn a briefcase full of one hundred grand in unmarked
bills Yeah That's the grease this dough to the buyer
It's a kickback and it's an obvious one In real
life kickbacks are way more insidious secretive clever head of
sales of del fi owns a beach house in the
hamptons Maybe he you know lets his buyers stay there
on weekends And maybe he provides them with well all
kinds of recreation You can let your mind wander So
sound like a ludlum me kind of ah spy novel
With corporate intrigue well guess what This happens all the
time that's happened a big companies and little hewlett packard
and oracle and others they've all come down with sales
People being nailed exacts being fired and businesses well continuing
to practice this practice more or less The big problem
Foreign markets yeah there they do kick back so just
kind of a regular part of doing business So if
we're trying to play by our rules in america and
imposing them on some small struggling nation where the people
are desperate to simply make enough money to feed their
children wealth and how we think about the morality of
kickbacks we know this guy's position on the matter We
should remember that from inside the jail bars when we're 00:01:57.722 --> [endTime] nailed
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