The two-day investigation by the Competition Commission of India (CCI) into top ad firms (GroupM, IPG, Publicis, Madison and Dentsu) over the alleged unfair trade practices has set a strong precedent for the advertising industry, forcing agencies and broadcasters to rethink their pricing structures and ensure fair competition in media buying.
According to industry watchers, the CCI’s raids will leave the media agencies grappling with a massive trust deficit in the longer run.
The investigation into alleged price-fixing and discount collusion by top broadcasters and advertising agencies also targeted the Indian Broadcasting and Digital Foundation (IBDF), a key industry group representing broadcasters, the Advertising Agencies Association of India (AAAI), and the Indian Society of Advertisers (ISA). The central issue appears to be price-fixing, which occurs when multiple companies collude to set prices at an agreed level, rather than allowing the market to determine them through competition.
Read more: CCI raids at dentsu, GroupM, IPG, Publicis fuel unrest; stakeholders demand fair probe
In the context of advertising agencies, price-fixing could involve collusion between media buying agencies, broadcasters, and even smaller advertising firms.
As the investigation progresses, the involvement of global agencies and industry associations in these practices could lead to a broader reassessment of how media buying and advertising rates are set across the country. If proven, these practices could have far-reaching implications for the industry, with potential consequences for both the involved agencies and the advertisers who rely on fair and transparent pricing to run their campaigns. The outcome of the investigation could reshape how the advertising industry operates, driving more competitive pricing and increased scrutiny of media buying practices.
A top media planner pointed out that the CCI could have done better due diligence before conducting the raid. Not only is it an extremely heavy-handed measure but it also negatively affects the goodwill that these agencies have earned in the market along with leading to the disruption of long-standing relationships they have created with clients. Eventually, this would undoubtedly result in a loss of client confidence.
“One can only hope they take cognisance of their actions and are held accountable if these allegations turn out to be false,” it was added.
If the agencies are found to be guilty, experts noted that the investigation will have serious ramifications for media buying agencies in the future, creating a massive trust deficit that will take years to recover from.
Holding the agencies culpable, as they are supposed to represent the interest of their clients over the broadcaster’s, Samit Sinha, managing partner, Alchemist Brand Consulting, said that he hopes that this 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.
Shivang Shah, founder, Django (advertising agency) remarked that media is run by the mafias – the kickbacks and the rates make it almost impossible for newer agencies to come close to them. According to him, it’s a known case that price fixing happens in the industry.
The recent raids on top ad agencies signal a major shake-up in the industry. Allegations of anti-competitive practices, if proven, could result in severe penalties— up to 10% of annual turnover— setting a strong precedent for transparency and fair play in advertising.
However, the immediate impact is disruptive. Such investigations create uncertainty for clients, potentially delaying campaigns and affecting business continuity, added a media executive.
Additionally, if penalties are imposed, agencies may pass on the financial burden to clients, leading to higher advertising costs. It also raises concerns about regulatory overreach— whether such scrutiny could deter global firms from investing in India’s advertising sector.
Overall, while the raids promote accountability, they also expose the vulnerabilities of the industry often reliant on deep-rooted relationships and opaque dealings.
How Can Agencies Recover
Other than creating a trust deficit, the ongoing case is likely to have a significant impact on the overall advertising industry. This crackdown reinforces the need for ethical business practices, ensuring smaller agencies get a fair shot at competing in a market dominated by global giants. Meanwhile, it also pushes agencies to adopt clearer, more accountable financial dealings, benefiting both clients and industry stakeholders.
“This case will ensure that clients get a lot more careful on their buying and inventory management. The agencies will also become careful in the way they present and maybe there will be use of technology for clients to constantly track how the budgets are used and spent,” highlighted Naresh Gupta, co-founder, Bang In The Middle.
As an impact, while the agencies have invested in data management, they will now also invest in inventory and pricing management platforms.
“If the allegations hold, this could serve as a wake-up call for the entire sector, reinforcing the need for stronger compliance, fair competition, and governance frameworks,” added Ambika Sharma, founder and chief strategist, Pulp Strategy.
Read more: Explained | Price-fixing in advertising: Causes, consequences, and regulations
The CCI’s investigation into major ad agencies is a pivotal moment for the industry, with implications extending far beyond the agencies involved. Transparency and ethical business practices are fundamental to sustaining trust in the advertising ecosystem.
Furthermore, given the raids took place just a few days before the Indian Premier League, advertising spends might also be impacted as many advertisers close the deals at the last minute. While operations might not have come to a standstill at agencies, this would give chance advertisers to negotiate further.
“The long-term impact of the investigations will depend on how agencies adapt to stricter compliance without stifling creativity and competition,” concluded a media buyer.