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India raided offices of top media agencies this week

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Japan's Dentsu ( DNTUF ) shared evidence with India antitrust

body-source

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Investigation into suspected collusion on prices,

discounts

By Aditya Kalra

NEW DELHI, March 21 (Reuters) - India's antitrust raids

this week on media buying agencies followed tip-offs under a

leniency scheme that reduces penalties for companies providing

evidence, three people familiar with the matter told Reuters.

Japan's Dentsu ( DNTUF ) was at least one firm that has

applied for the scheme, one of the people said. Dentsu ( DNTUF ) declined

to comment.

On Tuesday and Wednesday, the Competition Commission of

India raided the local offices of WPP ( WPP )-owned GroupM, Interpublic,

Publicis and Dentsu ( DNTUF ), as well as high-profile Indian

broadcasters' body IBDF, over suspected collusion on ad prices

and discounts.

The three sources said the CCI investigation was linked to

the watchdog's leniency programme, which allows a 100% penalty

waiver for the first company coming forward with evidence of

wrongdoing, and lower waivers for subsequent ones, once the case

concludes.

One of the sources with direct knowledge of the matter said

Dentsu ( DNTUF ) made a leniency submission around February last year and

disclosed evidence related to pricing arrangements between

industry body the Advertising Agencies Association of India and

the IBDF, which dictated terms on discounting to win ad clients.

"If media agencies wanted to do business, they had to follow

these guidelines," the person added, referring to what they

viewed as a potential anti-competitive arrangement.

The CCI did not respond to Reuters queries. The AAAI and

IBDF, both of which were raided in the enforcement action this

week, also did not respond.

Ad giant GroupM, U.S.-based Interpublic's IPG Mediabrands

unit, and France's Publicis Groupe did not

reply to requests for comment.

It's not clear if any other company has made similar

leniency submissions.

The IBDF represents top domestic broadcasters, including

billionaire Mukesh Ambani's Reliance-Disney joint venture, Sony ( SONY )

and Zee Entertainment.

The CCI does not make public details of any price-fixing

investigations, and conducts such raids to seize potential

evidence. In the latest case, raids ran through Tuesday night

for over 24 hours.

India is the world's eighth-biggest ad market where revenues

of $18.5 billion last year are set to grow 9.4% in 2025, GroupM

estimates.

The investigation, which will drag on for months, comes amid

major shifts in India's ad landscape following a $8.5 billion

merger between Walt Disney ( DIS ) and Reliance's Indian media assets,

with the combined business estimated to have a 40% share of the

ad market in TV and streaming segments.

If found guilty, the media agencies may be liable to pay a

penalty of up to three times their profit for each year during

which the collusion took place, or 10% of their turnover for

each year of wrongdoing, whichever is higher.

In 2018, Anheuser-Busch InBev (AB InBev) told the CCI about

a beer industry cartel, triggering investigations involving

Carlsberg and United Breweries. In return, AB InBev got a full

penalty waiver in 2021.