COLLUSION OR COINCIDENCE? UNPACKING THE MEDIA BUYING MAZE

Anoushka Naveen and Jay Sharma

The authors are  5th year Law students at National Law Institute University, Bhopal

Introduction

In March 2025, the Competition Commission of India (“CCI”) conducted raids at major media agencies in the country, including Dentsu, Omnicom, Havas, Madison, IPG, GroupM and Publicis, alongside trade bodies including the Indian Broadcasting and Digital Foundation (“IBDF”), Indian Society of Advertisers (“ISA”), and Advertising Agencies Association of India (“AAAI”). The raids were initiated based on Dentsu’s application for leniency and allegations of media cartelization. These raids uncovered evidence of three cartels that had been coordinating commissions since 2023. A CCI document dated February 7, 2025, detailed agencies exchanging sensitive information both in WhatsApp groups and sending e-mails internally, as well as a number of meetings arranged by AAAI, which facilitated cartel-like price-alignment meetings demonstrating various degrees of cartel behaviour. This blog examines the legal framework, evolving media buying dynamics, digital advertising’s role, global parallels, and implications for stakeholders, offering a perspective on whether these practices reflect cartelization or competitive coincidence.

Legal Framework and CCI’s Enforcement

The Competition Act, 2002, governs anti-competitive practices in India, with Section3 prohibiting agreements causing an Appreciable Adverse Effect on Competition (“AAEC”). Such agreements can be horizontal or vertical in nature, depending on whom the agreement is between. Horizontal Agreements, which often result in cartelisation between players at the same level of production, are presumed to cause AAEC as per the Act.  However, such a presumption is rebuttable in nature, and the said agreement can be declared as not Anti-Competitive if the agreement relates to an efficiency-enhancing practice.

The 2023 Amendment Act introduced the Hub-and-Spoke mechanism under Section 3(3), which permits the CCI to reach a non-competing entity, like a trade association, that facilitates anti-competitive behaviour in a cartel. In simpler terms, if a business, group of businesses, or individual is not involved in a comparable or identical trade, they may nonetheless be assumed to be a party to an anti-competitive arrangement if they take part in or plan to promote it. This is important because AAAI organized virtual meetings to coordinate prices and discuss retaliation against non-compliant association members, which appears to be a hub that is furthering various anti-competitive arrangements.

The CCI’s leniency program, as outlined in the Lesser Penalty Regulations, 2009 (“2009 Regulations”), allows cartel members to receive a reduced penalty for providing information that would assist the authorities in prosecuting other members of that cartel. The reductions, as provided in Regulation 4 of the 2009 Regulations, go from where the first applicant can receive a 100% reduction in penalty, 50% for the second applicant, and 30% for subsequent applicants. In the case of In Re: Cartelisation in the Supply of Bearings, the CCI noted that engaging in discussions on prices was sufficient to constitute a contravention as it was an agreement, even though the agreement was not acted on. Dentsu’s application for leniency provided the CCI with the initial indication of collusion and systematic pricing coordination. The CCI’s report confirmed that it had found systematic collusion amongst the firms via correspondence on various WhatsApp groups and meetings held under trade bodies, informationally coordinated (as opposed to being enforced) prices from 2021-2025.

The minimum threshold for a prima facie case made before the CCI simply requires sufficient evidence from the complainant, to suggest that a prima facie case exists. In order to prove collusion, it requires proof of an agreement, which is often supported circumstantially, such as that there is a pattern of parallel pricing or documentation such as communications, particularly if it can be exacerbated by other circumstantial variables, including plus factors that further develop the case.

Media Buying: From Commissions to Opacity

Indian advertising agencies used to be paid a commission of 15%, which comprised 12.5% for the creative part and 2.5% for the media part. Commission-based media buying is under pressure from clients and competition, and most agencies are relying on some form of fee-based model. Fixed-fee contracts can create efficiencies for agencies, since they will lock in rates with broadcasters, but create unobservable margins when the agency’s actual cost is lower than the locked-in amount. Incumbents are given preference because of their strong relationships with clients or broadcasters, not because agencies are working together to fix the market. Volume-based opt-in contracts like rebates and/or bonus inventory seem highly standard in media, but could be considered opaque in the absence of this information being disclosed as part of the service-level agreement.

Auditors now scrutinize media buying, adding transparency but raising concerns about confidentiality, as they often consult across competing accounts. The CCI’s raids probed whether AAAI, ISA, and IBDF facilitated price-fixing or commission norms, with evidence suggesting coordination through industry guidelines. While these practices are not inherently anti-competitive, their opacity could enable tacit collusion, especially if trade bodies act as hubs under the 2023 Amendment. The broken pitch process, especially the over-emphasis on pricing, perpetuates the existing dysfunctional system. However, proving collusion based on a specific method of commission remains complex in a feasibly fragmented marketplace.

Digital Advertising’s Growing Influence

The rise of digital advertising, driven by programmatic buying and real-time bidding, introduces transparency but concentrates market power with platforms like Google and Meta. The CCI’s 2024 probe into Google’s ad tech practices for alleged dominance, coupled with raid findings on Big Tech’s role in media buying deals, suggests collusion could span traditional and digital realms. When agencies negotiate with digital platforms, they may  inflate advertiser costs, impacting consumers through higher product prices. The $8.5 billion Reliance-Disney merger, controlling 40% of India’s ad market, further concentrates digital influence, raising concerns about market control.

Digital platforms’ automated systems reduce opportunities for traditional collusion but create new risks, such as algorithmic price coordination. Blockchain technology could enhance transparency in digital contracts, mitigating opacity in backend deals. The CCI’s focus on digital markets reflects a holistic approach, as traditional and digital media buying increasingly intersect.

Global Parallels

India’s concerns are reflected in antitrust scrutiny around the world. Power disparities are highlighted by the US Department of Justice’s 2023 case against Google, which resulted in a 2025 ruling of illegal ad tech monopoly. As India’s digital ad market expands, the European Commission’s 2021–2024 investigations into Google’s ad tech take divestiture into consideration. CCI’s strategy is informed by these cases, which highlight the necessity of addressing market concentration in both digital and traditional advertising.

As highlighted in Competition Commission of India v. Schott Glass India Pvt. Ltd., large players’ volume-based rebates, which are sometimes misinterpreted as cartel behaviour but may be legitimate market power, present obstacles for smaller agencies. If collusion raises media prices, advertisers may have to pay more, which would be passed on to customers in the form of higher product prices. With AAAI’s retaliatory conversations and WhatsApp exchanges suggesting collusion, the CCI’s findings point to systematic coordination. Nonetheless, audits and competitive pressures support market-driven parallelism, complicating the CCI’s task of distinguishing intent.

Conclusion

The conflict between collusion and market dynamics is exposed by the CCI’s crackdown. Dentsu’s request for leniency, trade body facilitation, and opaque deal structures all point to coordination supported by the Hub-and-Spoke amendment. The growth of digital advertising and international parallels, such as Google’s US and EU cases, draw attention to more significant issues. The CCI’s evidence, WhatsApp messages and AAAI’s actions lean toward collusion, despite the fragmented commissions and audits suggesting competition.

The industry must embrace transparency through independent audits, blockchain for contract clarity, or standardized reporting in order to guarantee equity. Advertisers need transparent deal structures to prevent hidden costs, and smaller agencies need fair access. Strong enforcement facilitated by the CCI’s expanded authority, which includes fines of up to 10% of worldwide turnover, is the need of the hour. Regulators must strike a balance between innovation and accountability as digital platforms transform media buying. Cooperation may be hampered by this investigation, but it could foster a competitive, transparent market, benefiting advertisers and consumers alike.