India raids global ads giants GroupM, Dentsu and broadcasters' body for...

The Competition Commission of India (CCI), the country’s antitrust authority, has conducted raids on the offices of several big global advertising companies and an industry body for broadcasters. According to sources who spoke to news agency  Reuters on Tuesday, these actions were taken after allegations of price-fixing in the advertising market came to light. Among the companies raided are some of the world’s largest advertising agencies, including GroupM (owned by British company WPP), Dentsu (from Japan), and Interpublic Group (IPG) from the United States. The Indian Broadcasting and Digital Foundation, which represents major broadcasters in India, was also included in the investigation.

Sources said that the CCI officers searched around 10 locations in major cities like Mumbai, New Delhi, and Gurugram. The raids are part of a larger case that has been started against these agencies and leading broadcasters for allegedly fixing advertisement rates and deciding on discounts together, rather than letting the market decide prices fairly.

In these surprise raids, CCI officials typically enter company premises without prior notice. They seize important documents, digital data, and record statements from senior officials to gather evidence. The investigation process is confidential and could take several months to complete.

The timing of this crackdown is significant. India’s advertising industry is currently witnessing big changes. Recently, an USD 8.5 billion merger took place between Walt Disney’s India media business and Reliance’s media assets. According to financial experts at Jefferies, this merger is expected to control around 40% of the advertising market in both television and streaming platforms.

When asked for comments on the raids, none of the companies GroupM, Dentsu, IPG Mediabrands, or the Indian Broadcasting and Digital Foundation, responded. The CCI also does not publicly share details about ongoing investigations or actions taken against price collusion cases.

The CCI’s focus is to investigate how these ad agencies might have worked together with certain broadcasters to unfairly control the prices of advertisements being sold to clients and discuss unauthorized discounts.

This is not the first time the CCI has taken such strong action. In December last year, it raided the offices of leading alcohol companies Pernod Ricard and Anheuser-Busch InBev, as part of an investigation into price collusion with retailers in a southern state of India.

The Indian Broadcasting and Digital Foundation includes leading broadcasters in the country, including companies part of the newly formed Reliance-Disney joint venture, as well as major networks like Sony and Zee Entertainment.

The current raids show that the CCI is keeping a close watch on big industries and taking steps to ensure that there is no unfair play or manipulation in India’s growing advertising and media market.