December 20, 2016 by Paul Dughi
The investigation into price fixing at major ad agencies just got bigger with the number of agencies publicly announcing they have been contacted by the Department of Justice.
Three of WPP’s subsidiaries have received subpoenas from the Justice Department relating to antitrust claims. By revenue, WPP is the world’s largest ad company. Others said to have been subpoenaed include Publicis, Omnicom, and Interpublic Group, according to the Wall Street Journal, which reports that all of the companies are cooperating with the investigation.
Under investigation is the claim that agencies steered video production to their in-house companies by undercutting the prices of its competitors, thereby manipulating the video ad production market. The Justice Department is throwing around words like “price fixing” and “bid rigging” in a marketplace estimated at $5 billion dollars.
Business Insider reports that K2 Intelligence has been asked to provide data as well.
K2 released a report on the lack of transparency in the ad industry, focusing on “media rebates” unknown to the clients. These rebates, the report says, are both unethical and pervasive in the industry.