It depends. I received best paper and other awards and have been (slightly) involved also in such a selection process.
In each case, I have been to the conference for my first time, was not invited, and I am not very well known. However, it was possible to achieve awards.
In one conference, the organizers had two or three papers on their short-list. The final decision fell depending on the quality of paper presentation. That is absolutely OK in my opinion, I even prefer such an approach as I have seen good papers with really bad presentations getting awards.
At some other conference, I got some special award. At the end of the day, one of the committee members told me he had suggested me because he liked my paper. I did not know him before, thus, this was also not rigged.
When I was a session chair on my own, I was allowed to suggest papers for the best paper award. I had a look at the papers and afterwards at their presentations. I dropped some of them due to their bad presentation and finally recommended one or two (however, they were not awarded, I was just allowed to give my/one opinion).
However, I have seen quite the opposite, unfortunately. In one (not very well known) conference, a guy I met there told me that Ms. X will get some award AGAIN. This happens every year because an award makes it easier for her to get funding for next year. Obviously, she was well known there. And to my surprise, she indeed got awarded. Not a best-paper award, but still some nice certificate.
As far as I have seen, there are huge differences between conferences. I have never seen such bad behavior in highly-reputed ones. If something like that becomes public, they would lose a lot of reputation. Especially since this could mean, that also their peer-review is rigged.