Department of Justice subpoenas Omnicom, Publicis divisions over bid rigging

Both holding company says they are fully cooperating with the ongoing investigation into production practices

Department of Justice subpoenas Omnicom, Publicis divisions over bid rigging

This story has been updated to reflect the new disclosure from Publicis Groupe. 

On Dec. 14, the US Department of Justice Antitrust Division subpoenaed two subsidiaries within Omnicom Group Inc. as part of its continuing investigation of video production and post-production practices in advertising, led by antitrust attorney Rebecca Meiklejohn. Omnicom’s outside legal counsel said in a statement that they’re in contact with Antitrust Division representatives and that the company is fully cooperating. Omnicom agencies include BBDO, DDB Worldwide and TBWA Worldwide.

Hours after Omnicom released its statement, Publicis Groupe said that one of its divisions had also been subpoenaed.

Omnicom and Publicis become the second and third holding companies, respectively, that the DOJ has approached. On Dec. 7, Interpublic Group released a statement that the DOJ contacted one of Interpublic Group’s standalone domestic agencies: "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."

This all comes on the heels of an initial report by the Wall Street Journal that identified the DOJ as investigating claims that advertising agencies have pressured independent production companies to bow out of contract bids so they could do the work in-house. The smaller production houses have said that ad agencies asked them to inflate their bids, which made them seem less attractive to clients. If these price fixing and bid rigging allegations are found to be true, they would be violations of the American antitrust law. Though no evidence has been made public yet, the Journal cited an October memo from the production company trade group AICE, which said that independent firms play ball "for fear of alienating an agency and risking future opportunities for work."

Meiklejohn should be a familiar face to those in the industry. In 2005, she prosecuted six people in the Grey/Color Wheel scandal for bid-rigging, and she has subpoenaed K2's records regarding this year’s media transparency report for the Association of National Advertisers. 

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