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Ad Giant Subpoenaed by Justice Dept. in Price-Fixing Probe

Dec 20, 2016  •  Post A Comment

The U.S. Department of Justice, which is investigating allegations of price fixing among the top advertising firms, subpoenaed three of the subsidiaries of WPP, the world’s largest ad company by revenue. The Wall Street Journal reports that WPP confirmed Monday that it had received the subpoenas, although the company would not identify which units received them.

The subpoenas come as the Justice Department’s antitrust division is looking into video production and postproduction practices in the ad industry, which is accused of price fixing in video-advertising production.

“Last week, French advertising giant Publicis Groupe SA and Omnicom Group Inc. of the U.S. each acknowledged that subsidiaries had received subpoenas,” WSJ reports. “Interpublic Group also recently disclosed that it was contacted by the Justice Department’s antitrust division ‘for documents regarding video production practices.’”

The moves come after allegations surfaced that ad agencies have been inappropriately directing contracts for commercial production to their in-house units, giving them an unfair advantage over independent firms.

“The production and postproduction work on commercials is a roughly $5 billion business in the U.S. and involves services such as directing, sound editing, special effects and color correcting,” WSJ notes. “The sector includes hundreds of small independent companies that often compete for contracts.”

The companies have all said they are cooperating with the investigation.

2 Comments

  1. People at these agencies need to go to prison if this is true and quite frankly it is true. Lock them up because this simply screws independent contractors that they ask for an RFP just so that their internal groups can come in lower and the crooked agencies keep the business in house.

    They need to send these people running these agencies to prison. No fines. Prison.

  2. Like so many other ill-fated DOJ “probes” into the advertising industry, this so-called investigation will go absolutely nowhere. Rightly so.

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