Madison asks court to quash antitrust probe into the ad agency

Madison Communications is asking a courtroom to quash an antitrust investigation into the advertising company, arguing its executives had been unlawfully questioned throughout March raids with out an legal professional current, courtroom papers reviewed by Reuters present.

Madison was amongst quite a few advert companies and a bunch of broadcasters raided by the Competitors Fee of India (CCI) on suspicion of collusion over promoting charges and reductions, within the nation’s strictest regulatory motion on the sector so far. Different companies raided embody international giants WPP’s GroupM, Dentsu, Publicis and Omnicom.

The authorized motion filed by Madison with the Excessive Courtroom of Delhi on October 8 is the primary to hunt to have the probe into one of many companies halted.

In line with the 276-page courtroom papers filed on October 8, Madison’s Chairman Sam Balsara and Govt Director Vikram Sakhuja weren’t given any alternative “to have interaction or seek the advice of legal professionals earlier than their assertion was recorded in the midst of the evening, within the presence of armed personnel”.

In India, courtroom filings are usually not made public.

SEARCH MEMO ISSUE

Madison can be arguing that the raids have grow to be unlawful because the antitrust watchdog has not supplied the corporate with info detailing which paperwork and recordsdata had been seized in the course of the search, which is required below Indian legislation. “It’s a violation of the rules of transparency, equity, and due course of,” the courtroom papers mentioned. The CCI didn’t reply to a Reuters request for remark. A spokesperson for Madison additionally didn’t reply to a request for remark.

The watchdog launched the investigation after Dentsu disclosed alleged business malpractices in February 2024 below its leniency program, which permits lesser penalties for companies that share proof of malpractice.

The CCI’s preliminary evaluation discovered that the companies had been getting into into secret pacts to coordinate and agree on pricing by way of a WhatsApp group, in line with confidential case papers seen by Reuters.

The case will probably be heard by a New Delhi decide on Thursday. Potential outcomes embody agreeing to listen to Madison’s arguments in hearings which may take weeks, placing the CCI’s investigation on maintain or throwing out Madison’s plea.

Publicis in August additionally requested the Delhi Excessive Courtroom to order the watchdog accede to its requests to have entry to some case recordsdata. The courtroom has requested the CCI to clarify its stance and also will hear that case on Thursday.

In its motion, Publicis has not sought to have the investigation into it quashed.

EXECUTIVES SUMMONED

Madison can be arguing that the watchdog has unlawfully not allowed its legal professionals to assessment important proof that varieties the idea of the case.

In an August letter to Madison, contained within the courtroom papers, the CCI argued that Indian legislation doesn’t permit “for inspection of data of investigation” whereas the probe is underway.

CCI investigations sometimes take a number of months. The regulator has powers to impose monetary penalties on the companies of as much as 3 times their revenue or 10% of an Indian entity’s international turnover, whichever is increased, for annually of wrongdoing.

The CCI has additionally summoned Balsara and Sakhuja to look earlier than the investigation workforce subsequent week to supply sure clarifications, in line with the courtroom papers. Madison is searching for to have the summons quashed.