This week, Competition Commission of India (CCI) launched a significant investigation into alleged price-fixing and discount collusion by top broadcasters and advertising agencies. Officers from the CCI conducted raids at approximately 10 locations, including the offices of several global advertising giants, such as GroupM and Dentsu.
The raids also targeted the Indian Broadcasting and Digital Foundation (IBDF), a key industry group representing broadcasters and also ISA or Indian Society of Advertisers.
Storyboard18 spoke to a senior advertising veteran who was questioned by the CCI during this investigation. The leader, who requested anonymity, revealed some crucial details of the investigation and their personal experience with the CCI’s inquiries.
The raid is believed to stem from a formal complaint filed in early 2024. “It was complaint no 2 from 2024.”
According to the source, the CCI’s questioning was comprehensive, with officials probing into a range of activities, including agency dealings with media houses, interactions with industry bodies like ISA, and the structure of agency commissions. The questions appeared to center around potential collusion, unfair practices, and the transparency of transactions within the media and advertising sectors.
When asked about the origins of the investigation, the senior leader suggested that the CCI may be following up on a specific complaint regarding rate hikes that had been previously filed by an advertiser with ISA. The advertiser had raised concerns about increased media buying costs, which are believed to be a major factor in the case. However, when the agency head inquired directly with the CCI about the motivations behind the probe, the response was that the investigation was suo motu, or initiated by the CCI itself, and not triggered by any external complaints or entities.
This response has raised questions within the industry, with many speculating whether the CCI’s raid could have been influenced by previous complaints, or if it is part of a broader effort to examine possible anti-competitive practices in the Indian media and advertising sectors.
The CCI’s actions come amid growing scrutiny of advertising industry practices, especially in the context of media buying, pricing transparency, and the role of intermediary bodies. While the investigation is ongoing, the implications for media agencies, advertisers, and industry bodies like ISA, AAAI, and IBDF could be significant, especially in terms of how agency commissions and media deals are structured in the future.
As the investigation continues, the advertising industry remains on edge, with more stakeholders expected to come forward with their perspectives and concerns.
Read More: Explained | Price-fixing in advertising: Causes, consequences, and regulations