The raids by the Competition Commission of India (CCI) on top media agencies and other industry bodies this week were a result of tip-offs from companies who benefitted from a leniency scheme, which granted reduced penalties in exchange for evidence, said a Reuters report.
According to the report citing sources, Dentsu was part of the scheme and provided evidence against other agencies to the anti-trust body. Reuters stated that it wasn’t privy to who the other companies were part of this leniency scheme.
exchange4media had earlier reported on the speculation that the tip-off leading to the raids may have come from an insider.
Once the case concludes, the leniency programme will provide a 100% penalty waiver to companies that came forward with evidence of wrongdoing and lower penalties for those subsequently aligned with CCI.
The report further mentioned that Dentsu made a leniency submission around February 2024 and provided evidence of price-fixing arrangements between the Advertising Agencies Association of India (AAAI) and the Indian Broadcasting and Digital Federation of India (IBDF), which reportedly “dictated terms on discounted to win ad clients.”
Many industry insiders believe agencies are facing scrutiny over alleged undercutting on commissions, a practice where they reduce their fees to secure larger media budgets from advertisers. By offering lower commission rates, agencies may aim to attract big-spending clients while potentially compensating for the shortfall through undisclosed media rebates.