WPP drawn into US Department of Justice investigation

WPP has confirmed that three of its subsidiaries have been subpoenaed by the Department of Justice, as part of the latter's investigation into production practices.

LONDON: WPP has confirmed that three of its subsidiaries have been subpoenaed by the Department of Justice, as part of the latter's investigation into production practices. 

In a statement, WPP said it was "fully co-operating with enquiries."

WPP, whose advertising networks include Y&R, Ogilvy & Mather, and Grey, is the fourth holding company to be approached by the Justice Department. The holding company's PR firms include Ogilvy Public Relations, Burson-Marsteller, and Hill+Knowlton Strategies.

Interpublic Group was the first to issue a statement, saying the Justice Department had been in touch with one of its U.S. domestic agencies.

On Friday, Omnicom confirmed two of its agencies had been subpoenaed. Publicis issued a follow-up statement hours later saying three of its agencies were also involved.

In early December The Wall Street Journal was first to report the Justice Department was investigating agencies over alleged pressure on smaller production houses, in violation of U.S. antitrust laws.

The investigation follows independent production companies alleging they were pressured to boost their prices to make them appear less attractive to advertisers, meaning ad agencies won contracts to create spots in-house instead. Production companies were allegedly promised favorable treatment in the future in return.

"WPP confirms that, similarly to Interpublic, Omnicom, and Publicis, three of its subsidiaries have received subpoenas from the Department of Justice Antitrust Division concerning the division’s ongoing investigation of video production and post-production practices in the advertising industry," WPP said in a statement. "WPP and its subsidiaries are fully cooperating with the enquiries."

This story first appeared on campaignlive.co.uk.

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