The US Justice Department is investigating whether advertising agencies inappropriately steered business producing commercials to their in-house production units over independent companies by rigging the bidding process for those contracts, according to people familiar with the matter.
Rebecca Meiklejohn, a government antitrust attorney based in New York, has been interviewing ad industry executives on the subject over the past few months, the people said.
The production and postproduction of commercials is a roughly $5 billion business in the US that involves services such as directing, sound editing, special effects and color correcting.
Hundreds of independent companies compete for those contracts. But the giant ad agencies whose creative teams conceive commercials also have been ramping up in these areas in the past several years, pursuing a growing revenue stream.
The Justice Department is investigating whether ad agencies are manipulating the bidding process, urging independent companies to inflate their prices so that contracts could be awarded to the agencies’ own production and postproduction outfits, according to the people familiar with thematter.
It isn’t clear which agencies are the subject of the government’s inquiry. Many of the big agency holding companies, including WPPPLC, Omnicom Group, Interpublic Group and Publicis Groupe, have in-house production and postproduction divisions.
Full Content: The Wall Street Journal
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
T-Mobile’s Acquisition of Ka’ena Corporation Receives FCC Approval
Apr 26, 2024 by
CPI
UK Regulator Announces Two New Senior Executive Appointments
Apr 26, 2024 by
CPI
Paramount Global and Skydance Media Near Merger Deal, Eyeing CEO Change
Apr 26, 2024 by
CPI
BHP Unveils £31bn Mining Megamerger Proposal with Anglo American
Apr 25, 2024 by
nhoch@pymnts.com
ByteDance Prefers Shutdown Over Sale of TikTok Amid US Ban Threats
Apr 25, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI