CCI cracks down on ad agencies, industry bodies over alleged price collusion

Mumbai/New Delhi: India’s advertising and broadcasting industries were rattled on Tuesday after the Competition Commission of India (CCI) conducted extensive searches at the offices of top media agencies and industry bodies.

The searches, conducted in Delhi-NCR and Mumbai, targeted the offices of some of the biggest entities in the sector, including GroupM, IPG Mediabrands, Publicis, Dentsu and Madison. Offices of the Advertising Agencies Association of India (AAAI), the Indian Broadcasting and Digital Foundation (IBDF), and the Indian Society of Advertisers (ISA) were searched as well.

According to a person familiar with the matter, the action followed allegations of price collusion and anti-competitive practices within the media buying ecosystem. The competition watchdog is investigating claims that advertising agencies and major broadcasters engaged in fixing ad rates and created opaque rebate structures, which could have led to an unfair market environment.

Reuters was the first to report the searches on Tuesday.

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An executive from a leading agency, speaking on condition of anonymity, described the move as “unprecedented and aggressive.”

“It’s unusual for the CCI to target an entire industry like this in one sweep. This kind of action typically comes after prolonged investigation and strong prima facie evidence. The impact of this will be far-reaching, as it could disrupt ongoing negotiations and media planning for several top brands.”

The CCI has not issued any statement on the raids or the specifics of the investigation. Queries emailed to the CCI on Tuesday seeking comments remained unanswered at the time of publishing.

A legal expert pointed out that the inclusion of industry bodies suggests a broader case of cartelization. “When the CCI targets industry associations alongside individual companies, it often signals that there is evidence of coordinated efforts that may have created an anti-competitive environment, potentially disadvantaging smaller players in the industry,” he said.

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A top executive at one of the agencies searched said the searches’ timing might be strategic. “We are entering a crucial period for ad spends, with major sporting events like the Indian Premier League (IPL) around the corner. This investigation could reshape the way media buying is conducted in India.”

A senior competition lawyer, who did not wish to be identified, explained the legal process behind such investigations. “When the CCI initiates a probe into cartelization, it typically relies on multiple sources of evidence, including internal emails, call records, financial transactions and testimonies from whistleblowers or insiders. The raids are conducted to seize electronic and physical records that may indicate coordinated behaviour among market players. If a ‘smoking gun’—such as direct communication or written agreements—establishes collusion, the accused entities can face severe penalties.”

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According to him, the next step involves the CCI issuing a show-cause notice, followed by hearings where the accused parties can defend themselves. If found guilty, the companies can be fined up to 10% of their average turnover from the past three years. In some cases, executives involved in decision-making may also face personal liabilities, including bans from holding key positions in companies regulated under competition law. Furthermore, the findings of the CCI can open the door for civil suits from affected parties, leading to further financial and reputational damage.

The outcome of the probe could redefine how advertising agencies, broadcasters, and advertisers interact in India’s rapidly evolving media landscape, at a time the industry is navigating challenges from digital disruptions and shifting consumer behaviour.