A document has revealed that India’s Competition Commission of India (CCI) is investigating global advertising firms over alleged collusion on commissions. The probe, which included raids in March on the local offices of major ad agencies such as WPP-owned GroupM, Interpublic, Publicis, and Dentsu, was triggered by evidence suggesting anti-competitive practices.
According to a CCI document dated February 7, reviewed by Reuters, the antitrust body found that these agencies allegedly coordinated on commissions charged to advertisers, potentially violating Indian competition law. The document indicates that three separate cartels operated through industry groups: the Indian Society of Advertisers (ISA), the Advertising Agencies Association of India (AAAI), and the Indian Broadcasting and Digital Foundation (IBDF).
The CCI’s initial review of evidence suggested that this misconduct had been prevalent since at least 2023. Advertising agencies reportedly exchanged commercially sensitive information on WhatsApp groups and agreed to adhere to pre-decided commission structures. The CCI noted in its initial review that “AAAI and its members are in contravention” of competition laws, leading to the order for the investigation and the subsequent raids.
The document also revealed that AAAI often organized virtual meetings among its members to align on prices and responses to be shared with clients, and even discussed “retaliatory action” against members who did not follow these guidelines. The CCI’s document stated that the group “also fixed the formula for fee in case of fee-based service to advertisers.”
The investigation comes at a time of significant shifts in India’s advertising landscape, including the recent major merger between Walt Disney and Reliance’s Indian media assets. India is the world’s eighth-biggest ad market, with revenues estimated at $18.5 billion last year. The CCI investigation is expected to continue for several months before any final findings are issued.
Key Highlights:
- A CCI document revealed an ongoing probe into global ad firms like GroupM, Interpublic, Publicis, and Dentsu for alleged commission collusion.
- The investigation was prompted by evidence of potential cartel operations through industry bodies like AAAI, ISA, and IBDF, involving the exchange of sensitive information and agreement on commission structures since at least 2023.
- The AAAI reportedly held virtual meetings to align on pricing and discussed actions against non-compliant members.
The CCI’s investigation, which included raids in March, could significantly impact India’s growing media sector and advertising practices.