CCI found global ad agencies colluded on fees, document shows
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India's antitrust body found that global ad agencies breached laws by coordinating on commissions they charge advertisers, prompting the watchdog's raids on advertising and media companies in March, according to a document which sheds new light on the investigation into the media sector.The Competition Commission of India conducted surprise raids in March at the local offices of ad agencies WPP-owned GroupM , Interpublic, Publicis and Dentsu and at the offices of an Indian broadcasters' body and an association of advertising companies.A CCI document dated February 7 and seen by Reuters on Friday sheds new light on allegations that three separate cartels operated through three different industry groups: the Indian Society of Advertisers (ISA), Advertising Agencies Association of India (AAAI) and Indian Broadcasting and Digital Foundation (IBDF).Before the raids, the CCI document said, it reviewed evidence that showed the alleged misconduct was prevalent since at least 2023, and advertising agencies exchanged commercially sensitive information on WhatsApp groups and agreed to adhere to pre-decided commission structures."AAAI and its members are in contravention" of competition laws, the CCI noted in its initial review, while ordering the investigation which triggered the March raids, the document said.AAAI also often organised virtual meetings among members to align on prices and responses to be shared with clients, and discussed "retaliatory action" against members who don't follow such guidelines, the document said.The group "also fixed the formula for fee in case of fee-based service to advertisers," CCI said.The groups - AAAI which represents GroupM, Dentsu and Publicis, ISA which counts dozens of Indian and foreign companies as members, and the IBDF group of broadcasters - did not respond to Reuters queries.The CCI also did not respond to a request for comment.The CCI does not publicly disclose any details of price fixing investigations. Reuters reported in March that the allegations relate to collusion between media buying agencies and broadcasters, and the case was triggered after Dentsu made disclosures under a whistleblower-type federal programme.The raids cast a shadow on India's fast-growing media and broadcast sector which counts Reliance-Disney and Sony as top players, and could alter how ads are priced and sold in the country.Detailing the allegations, the CCI document said the advertisers "established a buyer's cartel", while the broadcasters who provide channels separately engaged in "collective action to refrain from giving discounts" to clients.Another cartel "exists in the media segment of advertising agencies and attempts are underway" to establish a cartel in its creative business segment, the CCI added.The three industry groups also "coordinate their activities and indulge in collective negotiations ... on issues which should ideally be negotiated independently," it added."The respective industry association appear to evolve guidelines, advisories or negotiation parameters ... to secure the commercial interests of their members," it added.In recent weeks, AAAI privately asked its members to avoid discussions over pricing during meetings, where the group's legal adviser must be present, Reuters has reported.The investigation comes amid major shifts in India's advertising landscape following last year's $8.5 billion merger between Walt Disney and Reliance's Indian media assets, which is estimated to have a 40% share of the ad market in TV and streaming segments.India is the world's eighth-biggest ad market, where revenues stood at $18.5 billion last year, GroupM estimates.The CCI investigation is likely to continue for several months before final findings are issued.
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