Exclusive pricing agreements between three large advertising firms -- GroupM, Dentsu and Interpublic Group – and certain broadcasters is the subject of a Competition Commission of India (CCI) probe for alleged violation of anti-trust rules, said people with direct knowledge of the matter.
CCI had initiated a probe into the matter, based on complaints received from other advertising firms, they said.
At the heart of the matter are arrangements between large advertising firms and media broadcasters wherein the big firms were allegedly obtaining ad slots at a discounted price, prompting advertisers to opt for the large advertising firms.
The informants in the case have alleged these arrangements amount to market collusion, distorting the relevant market, the people cited above added.
Reuters reported on Tuesday that CCI conducted raids at ten locations of Groupm, Dentsu and Interpublic Group in cities including Mumbai, Delhi and Gurugram.
Moneycontrol could not ascertain who the informants were in the case.
Emails sent to GroupM, Dentsu, Interpublic remained unanswered. An email sent to CCI also remained unanswered.
“The investigation is likely to be around market cartelization since CCI keeps such probes under wraps until taking action such as raids to collect evidence. In other cases, CCI discloses the investigation while ordering I,” said a person cited above.
“The companies have requested CCI for more information regarding the probe to chart the next course of action. However, CCI is not under any obligation to disclose the information while a probe is under way.”
‘Pricing Agreements Common Practice’
However, advertisers are taking a view that there was no wrongdoing from their part, and it is common practice in both Indian and global markets to enter into such agreements. They further added that Indian advertising market was relatively fragmented with many domestic and international players operating in the space.
A lawyer cited above said these advertising firms had several foreign clients whom the agencies serviced in the Asia-Pacific region. “There are always price negotiation between the ad agency and the broadcaster and since the bigger firms bring higher volume of clients they may get some special treatment. However, that doesn’t essentially imply any wrongdoing on the part of advertisers,” the lawyer said.
Competition experts said, demarcating the relevant market in the case would be crucial. “If the relevant market is the overall TV advertising market in India, there may be no concerns since regional broadcast advertising market is relatively defragmented and has dozens of regional players along with the big firms,” said another of the people cited above.
In order to determine if there was any market concentration/collusion, CCI demarks a specific segment of market. For instance, in case of probe against food aggregators, CCI demarked the relevant market as food delivery through mobile applications.
To be sure, CCI raids do not essentially imply any wrongdoing. The evidence collected will be investigated by the DG who will submit a report to the CCI board. Following this, CCI undertakes adjudication process and provides an opportunity for the parties to respond to the allegations, post which an order is passed by the regulator.
According to a report by Pitch Madison Advertising, revenue in Indian television advertising market stood at Rs 34,453 crore in 2024, a 5% increase compared to previous year. India is the ninth largest advertising market in the world.
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