Advertising insiders tell the truth behind CCI raids

India’s advertising industry is reeling from a massive jolt as the Competition Commission of India (CCI) launched surprise raids on several media agencies, including GroupM, Dentsu, Madison, Publicis and Interpublic Group (IPG), as well as the Indian Broadcasting and Digital Foundation (IBDF), which represent major broadcasters, including JioStar, Sony, and Zee Entertainment.

The CCI's enforcement teams, accompanied by law enforcement personnel, executed searches across approximately 10 locations in Mumbai, New Delhi, and Gurugram. 

The raids are part of an ongoing probe into allegations of cartelisation, where businesses secretly conspire to fix prices, stifle competition, and keep advertising rates artificially high.

A key concern in this case is price-fixing, a practice commonly associated with cartels, where companies agree to set prices at predetermined levels rather than allowing market forces to determine them. This can inflate costs for advertisers and stifle innovation, ultimately hurting both brands and consumers. 

If proven, these malpractices could mean that advertisers ranging from major corporations to smaller brands have been paying inflated rates for years, with fewer choices and limited negotiating power.

Media reports suggest that the probe may have been initiated following complaints from either a large advertiser or a smaller agency that faced difficulty in securing fair deals. 

The revelations have sparked intense discussions within the industry. While some industry insiders acknowledge deep-rooted issues, others question the scale and validity of these allegations. Opinions remain divided.

Prathap Suthan, Managing Partner & Chief Creative Officer at Bang In The Middle, minced no words in his assessment of the situation. He said, "Corruption. Collusion. Camaraderie. The advertising and media industry runs on perception. The promise of efficiency. Transparency. Strategic decision-making. But behind that illusion, something else moves. Quiet deals. Backroom negotiations. Favours disguised as process. Money changing hands where no one is looking."

According to Suthan, media buying, agency relationships, and procurement are all part of a system designed to confuse outsiders while ensuring that only those in the know benefit. He further emphasised how rebates, kickbacks, inflated invoices, and undisclosed commissions are not exceptions but, unfortunately, an intrinsic part of how business is conducted.  

"The way things work," as he put it, “In India, the Competition Commission is pulling back the curtain. GroupM. Dentsu. Price-fixing. Money making. Cartels ensuring media rates stay high, discounts stay hidden, profits remain protected.”

He shared that this is not exclusive to India. Citing international examples, Suthan highlighted how similar cases have emerged across Asia, Europe, and the United States. From Japan’s dentsu rigging contracts for the Tokyo Olympics to Samsung’s advertising deals being entangled with political influence in South Korea, the issue extends far beyond India’s borders.

Industry veterans argue that the current crisis is rooted in long-standing structural changes. One major shift, according to Emmanuel Upputuru, Founder & Creative Chairman of EFGH Brand Innovations, is the separation of media and creative, a move that fundamentally altered advertising’s financial incentives.

"As Sir Martin Sorrell once said, ‘The toothpaste is out of the tube.’ The split between media and creative was bound to happen—and it’s messy. When the 15% media commission model disappeared, so did a lot of the built-in integrity.”

While the allegations have triggered skepticism across the industry, not everyone believes they will have a lasting impact.  

Hareesh Tibrewala, CEO of Anhad and former Joint CEO of Mirum, backed global agency networks, emphasising that companies like WPP operate under strict corporate governance policies.  

Tibrewala said, "I have been a part of WPP for many years. I know that WPP follows the highest standard of corporate ethics and standards, with very robust audit practices to ensure that the law of the land is being complied with."

While some defend the industry's corporate governance and the allegations haven’t been proven, one thing is certain: the credibility of global agency networks is now being questioned. 

Impact on smaller agencies and new entrants 

If found guilty, the implicated agencies could face severe penalties up to 10% of their annual turnover or three times their profits for each year of the collusion, whichever is higher.

Also, the allegations, if proven, could have a severe impact on newer players and independent agencies that are already struggling to navigate a highly competitive market.  

Chaaya Baradhwaaj, Founder & Managing Director of BC Web Wise, pointed out how such practices could stifle innovation:  

"If the allegations of collusion are proven true, it could have far-reaching implications—not just for major agencies and broadcasters but also for the overall trust in the ecosystem. For smaller agencies and new entrants, such practices—if they exist—only make an already challenging market even more difficult to navigate."

Baradhwaaj highlighted how a level playing field is crucial to ensure fair competition. When large agencies allegedly engage in opaque practices, smaller agencies often face unfair disadvantages, making it harder for them to secure major brand accounts.  

She further noted that regulatory scrutiny on the industry will likely increase.

“At a broader level, regulatory scrutiny is bound to increase. Large-scale consolidations, like the Disney-Reliance and Omnicom-IPG mergers, will likely attract more stringent oversight, which could redefine industry practices and pricing dynamics,” added Baradhwaaj, sharing the reasons. 

IPL and the disruption in media buying  

The raids have come on the heels of IPL, a time when advertising spends hit their peak. Marketers now find themselves navigating an air of uncertainty in media planning. The ongoing investigations have raised questions about transparency and pricing, leaving brands to rethink their strategies.

Baradhwaaj highlighted how this uncertainty might push brands to adopt a more cautious approach.

She said, "For brands, especially during high-stakes events like IPL, this uncertainty could lead to more cautious media planning and diversified spending strategies. We may see brands exploring alternative platforms, programmatic buys, and even direct partnerships with publishers to ensure transparency."

However, not everyone is convinced that these developments will have a significant impact on IPL advertising. Tibrewala remained skeptical about any immediate disruption.

"The CCI is obviously doing its job. But I doubt if any of these investigations will have an impact on the IPL season," stated Tibrewala.

The elephant in the room

The industry's lack of standardised practices and opaque dealings have long fueled concerns about transparency and accountability.

Upputuru pointed to the sheer complexity of today’s media landscape as a major challenge.

"With the multiplication of media vehicles, the sheer number of variables today makes monitoring incredibly difficult, and every transaction has become a negotiation rather than a standardised practice. Media agencies and broadcasters must actively work toward restoring trust by ensuring transparency in pricing, unbiased media recommendations, and ethical business practices. If the industry doesn’t self-regulate, external regulations will become more stringent."

At the same time, he acknowledged the irony of critiquing the system from a creative’s perspective. “That said, it’s rather rich (pun intended) to hear this from a creative guy’s lens—because once, when we used to do proactive work for awards, spending our own money out of pocket; It was called a scam.”

While agencies may argue that they operate within regulatory frameworks, industry insiders like Suthan maintain that the problem is systemic and global. 

He shared that there were cases where brands paid for digital advertising without knowing where their ads appeared.

Suthan added, “A luxury campaign appearing on extremist content. A company paying for reach that may not even exist.”

Regulatory bodies worldwide have started taking action. Suthan shared that WPP paid $19 million in fines for breaking corruption laws and dentsu Inc Japan executives faced prison for their role in bid-rigging.

“For every case that is exposed, a hundred more remain untouched. Digital advertising is no different. Billions spent. Results impossible to measure. Platforms creating their own metrics. Agencies charging for optimisation and inventory management, terms that mean nothing, numbers that mean even less,” added Suthan.

The advertising industry is at a crossroads. With the CCI raids exposing deep-rooted concerns, brands may push for greater in-house control over budgets, while independent agencies could leverage the disruption to position themselves as ethical alternatives. 

However, as Suthan put it, “The market will shift. Some brands will bring their budgets in-house. Some agencies will claim they are more transparent than the rest. Some independent players will gain from the disruption. But nothing will change. This is not new. It has always been this way. It will always be this way. Where there is cash for jam, the cats will always come." 

The question now is whether this moment will serve as a genuine inflection point for the industry or just another blip in a system designed to resist change.