The E-Sylum:  Volume 3, Number 23, June 4, 2000, Article 4

AUCTION ETIQUETTE 

   George Kolbe writes to remind us that bid rigging is a felony. 
   "Agreements among buyers at auctions not to bid against each 
   other for the purpose of purchasing goods at low and 
   non-competitive prices can be a criminal violation of the federal 
   anti-trust laws, punishable by heavy fines and imprisonment. 

   Section 1 of the Sherman Act (15 U.S.C. § 1) prohibits bid 
   rigging or pooling agreements among competitors if they affect 
   or restrain interstate commerce. Upon conviction, individuals 
   are subject to a maximum fine of $250,000 and/or three years' 
   imprisonment. 

   Bid rigging, or "pooling," consists of any agreement between 
   bidders at auction which lessens competition between them.  In 
   recent years, the U. S. Government and private parties have 
   brought lawsuits to restrain and/or penalize bid rigging in art and 
   collectibles auctions. Pooling agreements can be attractive to 
   buyers who do not understand that it is illegal.  Not only is bid 
   rigging a violation of the Sherman Antitrust Act, it is a "per se" 
   violation, meaning that once a bid rigging or pooling agreement 
   has been found, the Government does not have to show that 
   prices were actually affected by the arrangement.  In other words, 
   it would not be a defense that the presence of other bidders at 
   the auction caused the books or other items to sell for their fair 
   market value anyway. 

   In the 1988 case of United States versus Ronald Pook, antique 
   dealers were convicted of pooling at antique auctions.  More 
   recently, several dealers pleaded guilty to pooling at an auction 
   of rare bank notes at Christie's in New York." 

  Wayne Homren, Editor

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