India's Antitrust Watchdog Probes Ad Industry Bodies Over Cartel Allegations

Consumer Discretionary

a day agoPWG Publications

Introduction to the Investigation

The Competition Commission of India (CCI), the country's premier antitrust regulator, has launched a comprehensive investigation into several industry bodies in the advertising sector over allegations of cartelization. This move comes after complaints surfaced about potential violations of competition laws by key organizations such as the Indian Society of Advertisers (ISA), Advertising Agencies Association of India (AAAI), and Indian Broadcasting and Digital Foundation (IBDF)[1][2].

Background and Allegations

The investigation was initiated following an order in August 2024, allowing the CCI's director-general to probe potential cartelization in the advertising industry. The CCI conducted raids on the premises of these industry bodies and media agencies in March 2025, seizing relevant documents to scrutinize their guidelines and advisories[1][2].

Specific Allegations Against Industry Bodies

Indian Society of Advertisers (ISA)

The ISA is under scrutiny for its Model Agency Agreement introduced on August 3, 2023, which allegedly restricted negotiations between advertisers and agencies. This model agreement is said to limit the ability of advertisers to negotiate with agencies, potentially impacting agency revenues[1][2].

Advertising Agencies Association of India (AAAI)

In response to ISA's model agreement, the AAAI released guidelines on media agency remuneration, setting minimum commissions and incentives for traditional and digital advertising. These guidelines also include a formula for fee-based services[2].

Indian Broadcasting and Digital Foundation (IBDF)

The IBDF issued an advisory on September 11, 2023, outlining procedures for media account transitions. It prohibited agencies from offering unilateral discounts on existing channel rates for advertisers. Additionally, new agencies must indemnify IBDF members against losses from such discounts[1][2].

Expansion of the Probe

The CCI has expanded its investigation beyond traditional advertising to include digital advertising and potential involvement of Big Tech firms like Meta and Google. The regulator has used its leniency program to gather evidence, with Dentsu reportedly filing a leniency application. This has led to a broader scrutiny of media-buying practices, including programmatic advertising and potential anti-competitive agreements with Big Tech companies[3][4].

Key Players and Developments

GroupM and Dentsu: These major media agencies have been central to the investigation. GroupM's data was cloned during the raids, while Dentsu's leniency application provided crucial evidence[4].
Big Tech Involvement: The probe now includes examining whether Big Tech firms have influenced ad pricing or media-buying agreements, potentially undermining fair competition[4].
Leniency Program: The CCI's use of its leniency program has been effective in gathering evidence and encouraging cooperation from major players in the industry[3][5].

Implications and Future Steps

The investigation has significant implications for the advertising and media landscape in India. If the CCI finds evidence of cartelization or anti-competitive practices, it could lead to substantial penalties and a reshaping of industry norms.

Legal Framework

The Competition Act, 2002, specifically Section 3(3), prohibits agreements that restrict competition or fix prices within the same industry. The recent Amendment Act of 2023 introduced the Hub-and-Spoke mechanism to further combat cartelization[5].

Industry Response

Media agencies and industry bodies are awaiting further communication from the CCI. There is a call for a structured market research study to ensure that any regulatory intervention is informed and balanced[5].

Conclusion

The investigation by the CCI marks a critical step in ensuring fair competition in the Indian advertising industry. As the probe expands to include digital advertising and Big Tech companies, it underscores the regulator's commitment to addressing anti-competitive practices and fostering transparency in the sector.

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