CCI raids: Did Dentsu blow the whistle on India’s alleged media cartel?
Multiple insiders claim that the pressure came from Tokyo, nudging Dentsu’s Indian operations into a confrontation with its peers.
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In a stunning turn of events, the usually reserved Japanese media giant, Dentsu, has shattered the industry’s silence, stepping out of the shadows to become a whistle-blower. Filing a leniency petition with the Competition Commission of India against alleged cartelization in media, Dentsu’s bold move has sent shockwaves through the advertising world, top industry sources told Storyboard18.
But was it a choice made of free will, or was it the iron hand of its global headquarters forcing a seismic shift in India’s media landscape?
Multiple insiders claim that the pressure came from Tokyo, nudging Dentsu’s Indian operations into a confrontation with its peers. The timing is no coincidence. For nearly a year, Dentsu had been noticeably absent from major industry events, distancing itself from the Advertising Agencies Association of India (AAAI) and signalling its quiet withdrawal from the alleged cartel.
Storyboard18 had first reported about the Competition Commission of India (CCI) leveraging its leniency program to crack down on alleged cartelization and price-fixing in the media advertising industry. Designed to encourage whistle-blowers within cartels to come forward, the program played a pivotal role in exposing secret collusions between major media agencies and broadcasters.
The cracks in Dentsu’s relationship with the industry started showing when a top agency snatched two major accounts - an automobile giant and an FMCG behemoth. The account losses in 2023 also exposed the deep discounting and the controversial commission system that had long dictated industry pricing. A top industry source reveals, "This wasn’t just about ethics. Dentsu was wounded. Losing those accounts made them question the system - and their place in it. They had to fight back."
And so, the gloves came off.
By early 2024, the Competition Commission of India (CCI) had already launched an investigation into cartelization in media. As the investigation gained momentum, Dentsu found itself in a precarious position - stay silent and risk being implicated, or break ranks and seek immunity.
With the walls closing in, Dentsu had only one way out - cooperate or collapse. The decision was swift. The Japanese headquarters was alerted, and soon, the directive was clear: file for leniency, expose the cartel, and secure immunity.
For Dentsu’s top brass in India, still reeling from their financial setbacks, the decision was a no-brainer. They filed the leniency petition.
Dentsu’s gamble could bring redemption - or exile. The CCI’s leniency program offers protection to the first cartel member who comes forward, disrupting the tightly held industry secrets.
A veteran industry leader warns, "Japanese firms are known for their integrity, but also their discretion. Dentsu’s move is unprecedented."
CCI investigations also disclosed that significant evidence also pointed towards Big Tech firms involvement in influencing ad pricing, digital media spending, and long-term media-buying agreements. If confirmed, this could expose an intricate web of anti-competitive behavior, with tech giants colluding with media agencies to dominate the digital advertising ecosystem.
