CCI likely to widen the ambit of probe into ad-media firms' cartel issue

The Competition Commission of India (CCI) could expand the ambit of its probe in the ad-media firms’ cartel issue in a bid to include more advertising agencies and associations, according to people in the know.

 

Sources said that CCI’s team — after going through all the evidence accumulated so far — is expected to widen its investigation. 

The antitrust regulator has used its leniency programme to gather evidence on the alleged cartelisation in the advertising and media buying industry, according to sources. 

The leniency programme of CCI allows the regulator to encourage whistleblowers in such cartels to provide information on such outfits and gives penalty relaxation to them in exchange. 

Last week, the CCI had conducted raids at media buying agencies like GroupM, Dentsu, Madison and IBDF for alleged collusion between them and top broadcasters for fixing ad rates. 

The CCI has seized laptops and hard drives in the course of its investigation and all the data gathered is being probed by its forensic team, sources said. 

These raids conducted by CCI came just a few days before the Indian Premier League (IPL), which is one of the prominent events for advertisers in the country.

 

According to an industry expert, these raids would not impact upcoming deals (purchase of ad spots ahead of the tournament). 

Some competition law experts, however, said that CCI needs to understand the ad agency business model better before taking action. This is because price discussions between agencies itself may not necessarily amount to cartelisation. 

When a government body targets companies and industry associations, it usually signifies a possible cartel business model, which can undermine small players, another legal expert said.  

Regulators opt for “leniency” arrangements due to the extremely secret nature of cartels where it is very difficult to get evidence. 

It is considered to be a pragmatic approach to tackle cartels, which is regarded as the most egregious violation of competition law. 

In The Crosshairs

 

CCI recently raided major media buying agencies, seizing laptops and hard drives for forensic analysis

  Antitrust regulator has used its leniency programme to gather insider evidence from whistleblowers

  Industry experts say the raids may not impact ad deals for IPL, despite their timing close to the tournament