WPP agencies added to US antitrust investigations over production costs

department-of-justiceWPP is the latest holding company to confirm it has been subpoenaed in the United States as a Department of Justice investigation into alleged bid-rigging by production companies widens.

WPP confirmed overnight it had been subpoenaed after Interpublic, Omnicom and Publicis all revealed they were “working” with the DoJ on its investigation into production and post-production companies owned by them and potentially anti-competitive bidding practices.

News of the investigation broke early in December in the US after it was revealed the DoJ was looking into the production and post-production industries.

In a brief statement released overnight, WPP said it has also been subpoenaed.

WPP confirms that, similarly to Interpublic, Omnicom and Publicis, three of its subsidiaries have received subpoenas from the U.S. Department of Justice Antitrust Division concerning the Division’s ongoing investigation of video production and post-production practices in the advertising industry. WPP and its subsidiaries are fully cooperating with the enquiries,” the statement said.

Omnicom, Publicis Groupe and Interpublic all released statements on December 16 confirming they had been joined in the investigation, with Omnicom and Publicis noting they were now working with external legal teams to assist the DoJ with its investigations.

In its statement, IPG went into detail about how it made sure bids for production and post-production work were handled on a level playing field.

“We can confirm that one of our standalone domestic agencies has been contacted by the Department of Justice Antitrust Division for documents regarding video production practices and is cooperating with the government,” IPG said.

“The policies in our company’s Code of Conduct require that we do business in a manner that is fully consistent with the best interests of our clients – in the case of production, that means requiring triple bids on all projects above a minimal dollar threshold.

IPG has established a long-standing record of holding ourselves to the highest standards of ethics and transparency and we expect all of our employees to act in accordance with our policies.”

The DoJ is investigating the way in which production companies owned by the major holding companies bid for work and if they have been manipulating the process through bid-rigging or price-fixing.

Agency groups have invested heavily in production and post-production services over the past 10-15 years as they sought to develop new revenue streams and take pressure of shrinking margins in creative and media.

The investigation comes just months after the Association of National Advertisers in the US released a scathing report into the media sector alleging that “non-transparent practices” were pervasive across media agencies in the US.

The report in the US forced the AANA in Australia to also address the issue of media agency transparency with its members.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.



Sign up to our free daily update to get the latest in media and marketing