Antitrust Sweep Uncovers Fee-Fixing Among Global Ad Firms

(MENAFN- The Arabian Post)
Arabian Post Staff -Dubai

India’s Competition Commission has uncovered evidence suggesting that major global advertising agencies, including WPP-owned GroupM, Interpublic’s IPG Mediabrands, Publicis, and Dentsu, colluded to fix commission fees charged to advertisers. This revelation follows surprise raids conducted in March at the Indian offices of these agencies, as well as at the Indian Society of Advertisers , the Advertising Agencies Association of India , and the Indian Broadcasting and Digital Foundation .

A confidential CCI document dated February 7 indicates that these agencies engaged in unlawful coordination through WhatsApp groups and virtual meetings, agreeing on fee structures and pressuring non-compliant members. The investigation revealed three cartels across different industry groups, with agencies and broadcasters also accused of collectively avoiding discounts to clients. The case was initiated under a whistleblower program, with Dentsu reportedly providing internal findings of price-fixing along with a controversial 2023 IBDF-AAAI document that discouraged undercutting and required agencies to provide a“no objection” certificate if clients switched firms.

The CCI’s raids, which began early on March 18, targeted around 10 locations across Mumbai, New Delhi, and Gurugram. Officials scrutinized emails and cloned evidence from mobile phones at GroupM’s Indian office, among others. These actions come amid significant changes in India’s advertising market, following an $8.5 billion merger between Walt Disney and Reliance’s media assets, capturing a substantial market share. The investigation, which dates back to last year, focuses on alleged collusion on ad pricing and discounts. If found guilty, the agencies could face hefty penalties. The CCI does not disclose details of ongoing investigations, which could take months to resolve.

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Following the raids, the AAAI issued an advisory on March 26, urging members to avoid discussions over pricing or other commercially sensitive information during meetings, and to exit existing WhatsApp groups to prevent further scrutiny. The advisory emphasized compliance with India’s competition laws to avoid further scrutiny.

The CCI’s investigation has significant implications for India’s $18.5 billion advertising market-ranked eighth globally-particularly amid ongoing consolidation such as Disney and Reliance’s $8.5 billion media merger. The outcome of the probe could redefine how advertising agencies, broadcasters, and advertisers interact in India’s rapidly evolving media landscape, at a time the industry is navigating challenges from digital disruptions and shifting consumer behavior.

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