CCI’s cartelisation investigation faces a roadblock on account of its own drafting issue

A recent investigation by the Competition Commission of India (CCI) probing a high-
profile cartelisation in the advertisement world got delayed because of the way one
of the parties was identified. In the process, the merits of the collusion allegations got
drowned in the anti-trust regulator’s own drafting discipline.

Last year, the CCI shook India’s nearly USD 30 billion media and entertainment
industry with dawn raids on the India operations of ad agencies– WPP’s, GroupM,
Dentsu, Publicis, Omnicom and others– over ​what the regulator suspected as
collusion by the agencies and top broadcasters on advertising rates and discounts.
CCI officials searched such companies’ premises in around 10 locations. Dawn raids
(unannounced inspection by regulators) are an important tool for competition
regulators across the world, but the Indian regulator has used it sparingly due to
various reasons. 

While the CCI correctly named the Indian entities of global networks such as GroupM
Media India, Dentsu Aegis Network India, Omnicom Media Group India, French
company Publicis was named as “Publicis Groupe,” under its global parent and
brand name, according to Reuters. Publicis is not a legal entity under Indian law; the
Indian entity is TLG India.

What followed was a blame game and the matter being referred to the court. End
July, after a year-long legal battle, the CCI cleared the way for its investigation into
alleged cartelisation by telling Delhi High Court it had no objection to adding TLG
India to the probe. Publicis Groupe has been wanting the CCI to name ​its Indian unit,
TLG India, rather than the parent, in the investigation. The company argued that
“Publicis Groupe” is not a legal entity in India and therefore cannot be proceeded
against.

This clearly is a matter of lost opportunity for CCI in making progress in its
investigation. As it is, cartelisation is hard to crack, and then CCI has not conducted
too many dawn raids—16 since it became operational in 2009.

Lapses on both sides seem to have taken place, leading to the delay in CCI’s probe.
While the CCI appears to have made a drafting error, Publicis also chose to litigate
the procedural issue rather than engage on the substance of the allegation. The
same is reflected in the fact that it pressed for a technical defect relating to the
parent versus Indian entity name. At the same time, Publicis was careful to frame this
as an issue of correction required at CCI’s end.

The naming problem also surfaced earlier on when a summons was issued to
Anupriya Acharya as “CEO of Publicis Groupe, South Asia,” a title TLG India’s
lawyers said corresponds to no legal person, according to Reuters.

The CCI tried to correct its own position by arguing the Competition Act lets it
investigate “associations of persons,” so “Publicis Groupe” could remain within
scope even without separate legal status. But then, it also agreed to add TLG India
as a party to the probe.

Section 3 of the Competition Act, 2002 clearly defines any agreement entered into
between “enterprises or associations of enterprises” or “persons or associations of
persons” while analysing anti-competitive behaviour that includes forming cartels.

Notably, the CCI added TLG India rather than substituting it for “Publicis Groupe,” so
both names now sit in the probe — a choice that seemingly defers, rather than
resolves, the question of which entity ultimately bears liability if the investigation
results in findings or penalties. Repeated procedural lapses can delay investigations,
increase enforcement costs, and undermine confidence in the effectiveness of
enforcement. Besides, these instances buy respondents time.

While the procedural issue may create grounds for legal challenge, it does not
weaken the substantive evidence of cartelisation. And since CCI has well-defined
sections under the Competition Act, as also the Companies Act 2013, as reference
to understand corporate structures in future, it can be more careful at the
investigation-initiation stage. Because as it pursues more cases against global
groups with layered local subsidiaries and joint ventures, this kind of entity confusion
is likely to recur. As regards multinational companies, they too need to understand
and rely on the Indian laws more proactively.