CCI finds evidence of collusion among global ad agencies on commission fees

The CCI alleges that three separate cartels operated within the industry through ISA, AAAI, and IBDF. These groups are said to have engaged in collective negotiations and evolved pricing guidelines designed to protect their members' commercial interests, behaviour that potentially violates competition norms.

author-image
Social Samosa
New Update
CCI

India’s antitrust regulator, the Competition Commission of India (CCI), has found that several global advertising agencies allegedly coordinated on the commission fees charged to advertisers, according to a report by Reuters.

The findings stem from an investigation launched earlier this year, which included raids in March on the Indian offices of four major advertising firms, WPP-owned GroupM, Interpublic, Publicis, and Dentsu, along with visits to the offices of the Advertising Agencies Association of India (AAAI), the Indian Broadcasting and Digital Foundation (IBDF), and the Indian Society of Advertisers (ISA).

A CCI document dated 7 February stated that “AAAI and its members are in contravention” of Indian competition laws. The initial review alleged that agencies exchanged commercially sensitive information through WhatsApp groups and adhered to pre-agreed commission structures, a practice that may have begun as early as 2023.

The document further outlines that the AAAI organised virtual meetings to align pricing strategies, formulate uniform responses to clients, and discuss punitive actions against non-compliant members. Additionally, it claims the group “fixed the formula for fee in case of fee-based service to advertisers.”

The CCI alleges that three separate cartels operated within the industry through ISA, AAAI, and IBDF. These groups are said to have engaged in collective negotiations and evolved pricing guidelines designed to protect their members' commercial interests, behaviour that potentially violates competition norms.

The investigation has also identified an alleged buyer's cartel among advertisers and a parallel effort among broadcasters to withhold discounts from clients. A further attempt to form a cartel within the creative segment of the advertising industry was also noted.

The probe was reportedly initiated after a disclosure by Dentsu under a whistleblower-like programme. It comes at a pivotal time for the sector, following the $8.5 billion merger of Walt Disney’s Indian assets with Reliance Industries, which created a media entity estimated to control 40% of India’s TV and streaming ad market.

India, the world’s eighth-largest advertising market, recorded advertising revenues of $18.5 billion in 2024, according to estimates by GroupM.

The investigation is expected to continue over the coming months, with final findings yet to be issued. It could significantly impact pricing practices and transparency across India’s growing media and advertising ecosystem.

CCI Cartelisation CCI raids advertising agencies CCI Raids