Blitz Bureau
Omnicom Media’s India chief was frustrated. It was October 5, 2023 and a rival was trying to poach the US firm’s client by offering lower prices, just weeks after global advertising agencies and broadcasters struck secret pacts on ad rates in the South Asian country, according to a Reuters report.
The attempt to woo the client violated the agencies’ agreement, Omnicom Media’s India CEO Kartik Sharma wrote in a WhatsApp group comprising a who’s who of advertising, according to excerpts of the discussion documented by antitrust investigators and verified by Reuters.
“This kind of practice is not in the spirit of what we are collectively trying to achieve,” Sharma wrote, without identifying the parties.
Shashi Sinha, then India CEO of New York-based IPG Mediabrands, suggested an industry group should “admonish the agency”.
The exchanges form part of a confidential dossier compiled by antitrust watchdog Competition Commission of India (CCI) that chronicles how global advertising companies, including leading US and European firms, coordinated to rig prices in the world’s most populous nation.
Dentsu pulls the plug on cartelisation, reports to CCI
Reuters reviewed evidence from the CCI investigation, including a 10-page document with messages and records of meetings between top advertising executives, and two industry agreements under scrutiny for antitrust violations; and interviewed two people familiar with the probe.
The key details, which haven’t been previously reported, centre on WhatsApp interactions involving 11 industry executives. They include the top India or South Asia executives of WPP’s GroupM; US-based Omnicom Media and Interpublic’s IPG Mediabrands; France’s Publicis and Havas Media; Japan’s Dentsu and India’s Madison World.
Over WhatsApp and in meetings, the executives coordinated responses to clients, which “resulted in alignment of competing advertising agencies,” CCI officials said in the August 9 dossier, determining on an initial basis that the conduct contravened competition law.
The firms agreed to cooperate on pricing, including not to undercut each other; colluded with broadcasters to deny business to agencies that didn’t comply; and discussed financial terms involving at least four Indian clients over conference calls, according to the investigation documents.
The documents don’t indicate whether the agencies’ foreign headquarters were aware of the executives’ actions.
A spokesperson for WPP Media, which until May was known as GroupM, told Reuters it was aware of the investigation but declined to comment further.
A Dentsu India spokesperson confirmed Reuters reporting that it had disclosed industry practices to the CCI in February 2024 under the regulator’s leniency programme, which enables lesser penalties for firms that share evidence of malpractice. The spokesperson didn’t address specific evidence raised in the dossier but said the firm had implemented stricter audits and controls.
The other agencies and their executives didn’t respond to Reuters questions about the antitrust probe and information in the dossier. The regulator also didn’t respond to queries.
Reuters had reported that in March, as part of the continuing investigation, the regulator raided the Indian offices of many advertising firms and an industry group that represents broadcasters, including the Reliance-Disney venture and Sony.
CCI investigations typically take several months. The regulator can’t press criminal charges, but can impose financial penalties on the media agencies of up to three times their profit or 10 per cent of an Indian entity’s global turnover, whichever is higher, for each year of wrongdoing.
Secret pacts
WPP Media, the world’s largest media buying agency, last year – when it was still known as GroupM – won new India business worth $447 million, followed by Omnicom’s $183 million, according to research firm COMvergence.
But India’s near-$30 billion media and entertainment sector is grappling with weak consumer sentiment. Ad spending will rise 7 per cent to $19 billion in 2025, the slowest growth in three years, according to GroupM estimates.