Price fixing in media is an issue that won’t go away – likely to be still more of one as the big holding companies increase their so-called. “principal” media business (buying media and selling it on) – and India’s Competition Commission (CCI) has been cracking down with a vengeance on the holding company media agencies and some national broadcasters.
WPP’s GroupM,IPG, Publicis and Dentsu have all been raided with some raids continuing into a second day. WPP claims to have a 45% share of media in India. The British-based holding company has already suffered heavily from enforcement actions in China with some senior staff arrested or fired and its China business dropping by around 21%.
The raids were carried out in New Delhi, Mumbai and Gurugram although the CCI has not yet given more details. If found guilty of serious offences media agencies may be liable to pay a penalty amounting to up to three times their profit for each year during the period in question or 10% of their turnover for each year whichever is higher.
The raids come when the IPL cricket tournament, India’s biggest sporting event, is clicking into gear. The danger for the media agencies is that advertisers will vote with their feet while the investigation, probably protracted, goes on, as appears to have happened to WPP’s GroupM in China.
