Industry wary as CCI raids ad agencies, IBDF, ISA 3 days before IPL

New Delhi: Amid the ongoing raids on the office premises of top advertising agencies, the Indian Society of Advertisers (ISA), and the IBDF, conducted by law enforcement authorities on behalf of the Competition Commission of India (CCI), the media and entertainment industry has already started discussions around the consequences of the action.

Pointing out the timing of the raids just three days ahead of the IPL, multiple stakeholders told BestMediaInfo.com that the move by the antitrust regulator could impact advertising spends both ways.

“The negotiations for IPL advertising are at their peak as several advertisers close their deals at the last minute. It is not good for the industry as operations have come to a standstill due to the raids,” said a senior executive at a broadcast network.

Multiple industry sources told BestMediaInfo.com that the action started with AAAI members and then expanded to other bodies such as the ISA and IBDF in an alleged price collusion.

Price collusion refers to an alleged anti-competitive practice where advertising agencies, broadcasters, and potentially global tech giants coordinate to manipulate advertising rates, discounts, or inventory prioritisation in a way that distorts fair market competition.

This could involve secret agreements or understandings to fix prices, limit competition, or unfairly favor certain players, ultimately harming smaller entities and consumers by reducing choice and inflating costs.

The investigation centres on whether top broadcasters and tech giants colluded with member agencies of the Advertising Agencies Association of India (AAAI) to prioritise their advertising inventories, breaching antitrust laws under the Competition Act, 2002.

Sources told BestMediaInfo.com that the complaint of collusion involves agreeing to set standardised or inflated advertising prices rather than allowing market forces to determine them.

The alleged collusion also aimed at ensuring that ad slots or digital inventories of colluding parties are given preference, limiting opportunities for independent or smaller players.

Sources suggest that the CCI’s raids, conducted across Mumbai and Gurugram, stem from a prima facie finding that these practices may have disadvantaged smaller market participants, a hallmark of predatory behaviour under antitrust scrutiny.

Law enforcement authorities are understood to have seized documents, phones, and laptops to uncover communication or data proving such coordination.

Section 3 of the Competition Act mandates the CCI to prevent anti-competitive agreements, including cartels that fix prices or rig markets. Section 4 pertains to abuse of dominance, which could apply if tech giants leveraged their market power to enforce these arrangements. While the exact role of global tech giants remains unclear at this stage, their involvement could relate to their advertising platforms (e.g., Google AdSense or Meta’s ad ecosystem) influencing or benefiting from these alleged collusive practices.