CCI investigates major ad agencies for price collusion

India's Competition Commission (CCI) has conducted searches at the offices of several major advertising agencies and industry bodies. This action took place on Tuesday in Mumbai and Delhi-NCR. The agencies involved include GroupM, IPG Mediabrands, Publicis, Dentsu, and Madison. The CCI also targeted industry groups like AAAI, IBDF, and ISA. The CCI's searches are related to allegations of price collusion and anti-competitive practices in the media buying sector. Sources suggest that the regulator is investigating claims that agencies and broadcasters fixed advertising rates and set up unclear rebate structures, creating an unfair market. An anonymous agency executive described the CCI's actions as "unprecedented and aggressive." They noted that such a large-scale inquiry is rare and usually follows extensive investigation and solid evidence. This move could disrupt ongoing advertising negotiations and planning for major brands. The CCI has not made a public statement on the raids or investigation details. Legal experts believe the involvement of industry bodies indicates potential coordinated activities that may harm smaller companies. The timing of the raids is seen as strategic, given that major sporting events, like the Indian Premier League, are approaching. This investigation might change how media buying takes place in India. A senior competition lawyer explained that the CCI gathers evidence from various sources before launching such investigations. The raids aim to collect records that could indicate collusion. If strong evidence is found, companies could face penalties, including fines up to 10% of their average turnover. The CCI's findings could have significant effects on the advertising market. They may also lead to civil lawsuits from affected parties, resulting in further financial and reputational consequences for the companies involved.