CCI found global ad agencies colluded on fees, internal document shows

The regulator had received specific inputs, which ultimately triggered the March raids at ad agency offices in Mumbai and Delhi

Ahead of its surprise raids at the offices of global advertising agencies in March, the Competition Commission of India (CCI) had received inputs suggesting that the firms were violating competition norms, according to a confidential document reviewed by Reuters. The CCI found evidence that the agencies colluded on the commissions charged to advertisers, in violation of Indian competition law.

 

The raids targeted the local offices of several major ad networks, including WPP-owned GroupM, Interpublic, Publicis, and Dentsu, as well as the offices of two key industry bodies—the Indian Broadcasting and Digital Foundation (IBDF) and the Advertising Agencies Association of India (AAAI).

   

The internal CCI document, dated February 7, sheds new light on allegations that three separate cartels operated through different industry groups: the Indian Society of Advertisers (ISA), AAAI, and the IBDF. 

 

According to the CCI’s initial findings, advertising agencies were found to have exchanged commercially sensitive information via WhatsApp groups and agreed to abide by pre-decided commission structures. The regulator noted that such conduct had been ongoing since at least 2023.

 

“AAAI and its members are in contravention” of competition laws, the CCI said in its review, which led to the March raids.

 

The document also revealed that AAAI regularly held virtual meetings to coordinate pricing strategies and responses to clients, and discussed “retaliatory action” against agencies that deviated from the agreed terms.

 

Whistleblower-triggered raids

 

Notably, the raids were preceded by whistleblower disclosures, according to Reuters. The CCI reportedly relied on its "leniency programme"—a provision under Indian competition law that incentivises insiders to reveal cartel operations in exchange for reduced penalties.

 

This method of information gathering is frequently used by global regulators to break through the secrecy of cartel behaviour.

 

The CCI's forensic teams collected digital data and physical documents during the 24-hour raid operations conducted across Mumbai and Delhi.

 

Under Section 3 of the Competition Act, the CCI is empowered to investigate anti-competitive agreements, including those involving price fixing, bid rigging, and market allocation.

 

The investigation is ongoing. 

The allegations

 

• 3 cartels operated via 3 different industry groups: ISA, AAAI and IBDF
• Misconduct was prevalent since at least 2023
• Ad agencies exchanged commercially sensitive information on WhatsApp
• Agencies decided to adhere to pre-decided commission structures
• Discussed “retaliatory action” against members who failed to follow these norms

 

(With inputs from Reuters)