Did you overpay for video production services?

The Department of Justice is opening up a number of investigations into alleged video production and video post-production bid-rigging and price-fixing. According to the Wall Street Journal, a number of companies are under investigation for potentially inflating the prices of third-party contractors in order to route work to their own growing in-house production teams. While there have not yet been any companies named, most of the largest advertising agencies have their own in-house production teams.

We are investigating claims of bid-rigging and price-fixing that may have occurred at large ad agencies, including Interpublic Group of Cos, MDC Partners, Publicis Groupe SA, Omnicom Group Inc., or WPP PLC.

Advertising is a suffering industry, the Wall Street Journal explains, and in June a report from the Association of National Advertisers found during seven-month probe that found nontransparent business practices were leading towards clients being taken advantage of by struggling ad agencies. As well, the AICE, a trade group that represents independent post production companies, released a statement accusing ad companies of using unfair business practices to keep their own postproduction studios rolling.

Check-bids are potentially the root cause of the problem and is the subject of investigation. Ad agencies allegedly coerced independent companies to provide bids that are higher to make their own in-house services more attractive to clients, withholding what work is available for independent companies if check-bids aren’t provided when called for.

As ad agencies have been squeezed to find new revenue streams, many of them have opted to start or purchase production and post production companies. Often these companies are held by the same company as the ad agency and employees may even work in the same space—but often operate under a different name.

If you worked with an ad agency for video production for your marketing campaigns, you may have been a victim to bid-rigging and price-fixing. We want to speak with you about your experiences working with your ad agency as we are building a case.

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