DOJ Closes Investigation Into Production Practices

Advertising Law

The Department of Justice has shuttered its investigation into the subsidiaries of five of the largest ad holding companies without taking any action, the companies recently revealed.

In 2016, the DOJ began looking into whether ad agencies were unfairly directing production business to their own in-house departments rather than to independent entities and fixing the bidding process by encouraging production houses to increase prices so the agencies’ in-house teams would be selected for the contracts.

IPG, MDC Partners, Omnicom, Publicis Groupe and WPP all confirmed that the DOJ has now ended the probes without taking action. The agency did not comment on whether its investigation continues or whether any wrongdoing has been found.

For example, WPP—which admitted that three of its subsidiaries received subpoenas—issued a statement that the company “has received confirmation that the DOJ investigation has closed without any action taken against the company, subsidiaries or employees.”

MDC Partners had not previously revealed that one of its subsidiary agencies had received a subpoena. But in a Securities and Exchange Commission filing, the holding company shared the subpoena news as well as a letter from the DOJ confirming that the “investigation has been closed, and all documents produced by the company and its subsidiary were returned to the company. The DOJ did not bring any charges against the company or its subsidiary.”

Similarly, Omnicom Group disclosed in an SEC filing that two of its subsidiaries received subpoenas in 2016 and that the investigation was closed without any action taken.

Publicis Groupe responded to an Ad Age inquiry about the investigation with a statement that the investigation into one of its subsidiaries was closed without any action and that the holding company “remains committed to transparency and to continue partnership with its clients with excellence and integrity,” while a spokesperson for IPG said the investigation into one of its subsidiaries was also closed without any action.

Why it matters: Now that the holding companies have confirmed that the DOJ has moved on from the production practices investigation, industry attention has turned to a new federal probe: the Federal Bureau of Investigation’s look into fraudulent media-buying practices. Most recently, the FBI turned to the Association of National Advertisers in an effort to obtain cooperation with its members.