Amid the ongoing investigation into alleged price-fixing in India’s advertising industry, tensions are running high. However, some voices have come forward in support of the media agencies involved— dentsu, Madison, IPG, Publicis, and GroupM.
As the Competition Commission of India’s (CCI) two-day investigation unfolds, many are questioning the regulatory overreach, highlighting the need for fair process, ensuring that genuine competitive practices are not stifled under broad-brush enforcement.
The reason behind the raid is the potential cartelisation and price-fixing in the advertising and media industry. During the investigation, the competition watchdog reportedly blocked the entries and exits of the offices of media agencies and seized the phones and laptops of employees.
Read more: CCI raids at top firms leave media agencies grappling with massive trust deficit
According to a media buyer, large agencies often negotiate on behalf of multiple clients, requiring collaboration between agencies and media platforms. However, such collaboration should not automatically be equated with price-fixing. Agencies may share information on market rates and strategies to secure better deals for their clients, but this exchange of information does not necessarily indicate any form of illegal collusion. These practices are often aimed at streamlining the buying process and delivering greater value to advertisers.
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 CCI investigation is focused on uncovering evidence, such as emails, pricing agreements, internal meeting records, or coordinated rate cards that suggest anti-competitive behavior.
The CCI investigations is said to be very focused in nature with specific questions pointed out to agency executives. Sources claim that multiple other agencies are also under CCI scanner for alleged price collusion. CCI officials are verifying the documents related to the investigations, and the CEOs of the agencies were also summoned to office.
Naresh Gupta, co-founder of Bang In The Middle, expressed support for the agencies involved, stating, “The last thing the media agencies need is even a hint of cartelisation. Controlling rates is tough for an agency as the rates are controlled by the publication or channels, and media agencies have very little leeway in trying to offer the price to their clients. While there may be minor differences between deals offered by one agency over another, it is very tough to maintain consistency. Media agencies have always built their business on expertise and planning and not just on rates. I hope the agencies will come out on top.”
A top media planner, speaking on condition of anonymity, added, “I don’t know if someone complained to CCI. I can’t think why CCI be even interested in investigating service agencies. The power to control prices lies with media owners. Not with agencies.”
Another media buyer told Storyboard18 that allegations of price-fixing are serious and should not be levied against some of the most reputed ad agencies in the country. According to him, this situation likely stemmed from a struggling economy and industry monopoly.
“…to begin with, the limping economy has led to slashed marketing budgets which has led to dwindling media spends from clients. Couple that with the fact that advertising and media are fast becoming a monopolistic “big boys club” with only the top 4-5 big names enjoying the maximum share of advertising industry revenue. It’s very possible that one of the agencies that was pained by the current scenario went ahead and reported these “price fixing practices” to the CCI.”
He pointed out that regulators nowadays are more willing than ever to take on media companies.
“Let’s also not discount that we are living in a time where regulatory bodies are no longer shy about flexing their might over influencers and powerful media entities. Be it the banning of Samay Raina’s YouTube show, the cancelling of Ranveer Alhabadia or the recent spate of calls for censorship on OTT platforms in the country, it was only a matter of time before the authorities came for media houses and agencies as well,” it was added.
The Indian advertising industry, which is a rapidly growing and projected to reach Rs 1.15 trillion by 2026, thrives on collaboration, partnerships, and innovation. While such scrutiny is necessary, it can also create uncertainty.
Read more: Explained | Price-fixing in advertising: Causes, consequences, and regulations
“It’s essential that the regulatory process remains fair, ensuring that genuine competitive practices are not stifled under broad-brush enforcement. The outcome of this case will likely set a precedent for how agencies structure contracts, procurement policies, and client engagements moving forward,” said brand strategist Ambika Sharma.
Some industry players have warned that an overly aggressive regulatory approach could stifle innovation and harm the industry in the long run. At the same time, they have emphasised that maintaining transparency in pricing should remain a top priority.
“It is critical to underline that interventions should be crafted to benefit the growth and integrity of the entire industry. Supporting or favoring specific businesses leads to skewed competition and undermines the trust that stakeholders place in regulatory measures”, concluded Aarti Notiyal, director- marketing – Bubble Communication. Impartial and balanced oversight is essential for fostering a fair and thriving environment where all companies have equal opportunities to succeed.