CCI raids: Other top agencies also under scanner for alleged cartelisation
Under Section 3(3) of the Competition Act, 2002, any agreement between players in the same industry that directly or indirectly determines prices or restricts competition is illegal.
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The officials from Competition Commission of India raided offices of GroupM, Dentsu and Interpublic Group in Mumbai, New Delhi and Gurugram for allegedly fixing ad rates and discounts. However, sources privy to investigations have indicated that other top media agencies are also under scanner.
Under Section 3(3) of the Competition Act, 2002, any agreement between players in the same industry that directly or indirectly determines prices or restricts competition is illegal. The investigation now will focus on unearthing emails, pricing agreements, internal meeting records, or coordinated rate cards that suggest anti-competitive behavior.
The CCI officials also visited the Indian Broadcasting and Digital Foundation office for investigation.
The action comes after CCI initiated a case against the agencies and top broadcasters over allegedly fixing ad rates and discounts. The case involves top agencies and top broadcasters over allegedly fixing ad rates and discounts.
Sources close to the development said, "The officials requested all the employees to switch off the cellphones and conducted searches. Officials searched only one floor of the Dentsu office. The officials have seized physical documents and electronics devices and evidences for further investigations."
Sources close to the development said, "The officials denied access to legal assistance. The officials claimed that they had search warrants but they never disclosed any atter to us. They also refused from answering any calls and seized our cellphones."
Media agencies, IBDF are yet to issue any statement related to the raids carried out in their premises.
If these firms are found guilty, the penalties could be severe fines up to 10% of their average annual turnover under Section 27, possible debarment from working with certain broadcasters, and mandatory corrective measures like greater transparency in pricing.
According to the legal expert, this case could set a strong precedent for the advertising industry, forcing agencies and broadcasters to rethink their pricing structures and ensure fair competition in media buying.
