Leniency option helps CCI crack down on ad agency cartel, gather evidence

The 'leniency programme' encourages whistleblowers in cartels to provide information on outfits and lessens their penalties in extenuating circumstances

The Competition Commission of India (CCI) has taken help from whistleblowers to gather evidence on cartelisation in advertising and media buying before the start of the Indian Premier League (IPL), according to sources in the know.

 

This method of information collection, known as “leniency programme”, encourages whistleblowers in cartels to provide information on outfits and lessens their penalties in extenuating circumstances.

 

Regulators opt for such “leniency” arrangements owing to the secretive nature of cartels, where it is difficult to get evidence.

 

It is considered a pragmatic approach in tackling cartels, the formation of which is considered a serious violation of competition law.

 

 On Tuesday, the CCI conducted raids at media-buying agencies like GroupM, Dentsu, Madison, and IBDF for alleged collusion between them and top broadcasters for setting ad rates, according to a source aware of the development.

 

Reports said there were raids on Publicis Groupe and Interpublic Group’s offices in India.

 

There was no response to email queries sent to the media-buying agencies and CCI.

 

A source close to the development said CCI officers came on Tuesday to his company for questioning. But the questions they asked were not very “clear and obvious” from the point of view of uncovering collisions on ad rates, the executive added.

 

When a government body sets its eyes on companies and industry associations, that usually signifies a possible cartel business, which can undermine small players, said a lawyer. The lawyer added in such cases the CCI could seize documents and electronic gadgets for investigation.