The Competition Commission of India is likely to conduct raids and investigations till Wednesday morning, sources tell Storyboard18. The officials were tipped off a supposed cartelisation of fixing ad prices and discounts after a GST inquiry at a media agency. On Tuesday afternoon, offices of GroupM, Dentsu, IPG and Publicis were raided by CCI officials.
According to sources close to the development, CCI officials are verifying the documents pertaining to the investigations. CEO’s of the agencies were summoned to office for investigations and have been asked to be present at the office on Wednesday.
The investigations are very focused in nature with specific questions pointed out to agency executives. Sources claim that, multiple other agencies are too under CCI scanner for alleged price collusion.
Under Section 3(3) of the Competition Act, 2002, any agreement between players in the same industry that directly or indirectly determines prices or restricts competition is illegal. The investigation now will focus on unearthing emails, pricing agreements, internal meeting records, or coordinated rate cards that suggest anti-competitive behavior.
The CCI officials also visited the Indian Broadcasting and Digital Foundation office for investigation.
The action comes after CCI initiated a case against the agencies and top broadcasters over allegedly fixing ad rates and discounts. The case involves top agencies and top broadcasters over allegedly fixing ad rates and discounts.
The agencies allegedly colluded with broadcasters to fix advertising rates, thereby limiting the ability of advertisers to negotiate competitive pricing. If proven, this would mean that large advertisers, who depend on these agencies for media planning and buying, were systematically overcharged through a coordinated manipulation of discounts, commissions, or bidding processes.
GroupM, IPG, Publicis, Dentsu, IBDF may face penalties up to 10% of annual turnover if found guilty in CCI investigation.
According to the legal experts, this case could set a strong precedent for the advertising industry, forcing agencies and broadcasters to rethink their pricing structures and ensure fair competition in media buying.
Storyboard18 reached out to media agencies, IBDF for a comment. They are yet to issue any statement related to the raids carried out in their premises.