India’s competition watchdog has raided the offices of GroupM, Publicis Groupe, Interpublic Groupe, Dentsu and Havas over alleged price rigging of TV advertising.
The Competition Commission of India sting has so far searched 10 locations in Mumbai, New Delhi and Gurugram, including the Indian Broadcasting and Digital Foundation (IBDF) and Indian Society of Advertisers.
The IBDF represents India’s largest domestic broadcasters, including Reliance-Disney, which merged recently to control 40 per cent of the ad market; Sony and Zee Entertainment.
Investigators allege media agencies colluded with certain broadcasters to fix the ad prices and discounts being sold to clients, according to a source speaking to Reuters, which first broke the story.
According to another report in India, advertising agency heads and CEOs have refused to respond to the allegations.
It has been reported that either a smaller rival media agency or large advertising alerted authorities to the practice.
Media agency groups often agree to volume deals with broadcasters that allow advertisers to receive cheaper rates, but it is unusual for different advertising groups to collude and fix pricing and discounts with certain broadcasters.
India is the world’s eighth largest advertising market with ad spend of $18.5 billion (A$29.3 billion).
