#e4mExclusive:  AAAI under fire for alleged prominent role in media cartelisation case

As the Advertising Agencies Association of India (AAAI) celebrated 80 years of existence this year, one of India’s oldest advertising industry bodies finds itself under an unprecedented cloud of regulatory scrutiny, with an ongoing Competition Commission of India (CCI) investigation threatening to cast a shadow over its legacy and credibility.

The celebration milestone comes at a time when the association is battling allegations that it played a facilitating role in alleged cartelisation practices among some of India’s largest media agencies. 

The probe, which intensified after raids conducted by the CCI in March 2025, had triggered widespread debate across the advertising and media ecosystem over industry practices, governance standards, and the role of trade associations in coordinating market behaviour.

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CCI document points to AAAI role

The CCI had carried out search and seizure operations across nearly 10 locations linked to leading advertising and media-buying networks along with industry bodies such as AAAI, the Indian Broadcasting and Digital Foundation and the Indian Society of Advertisers.

The regulator is examining allegations that competing agencies coordinated advertising rates, commission structures and discounting mechanisms in violation of Section 3(3) of the Competition Act, which prohibits anti-competitive agreements and cartel-like conduct.

A 16-page internal CCI document, dated February 7, allegedly outlines how commercially sensitive information was exchanged among agencies through WhatsApp groups, informal channels and virtual meetings organised under the aegis of industry bodies.

According to the document, the AAAI allegedly acted as more than a passive industry forum. The regulator claims the association facilitated coordination on commission structures and devised mechanisms to discourage members from deviating from agreed industry practices. 

In one instance, the report alleges, the association standardised a formula for determining fees in service-based contracts — a move the CCI believes could amount to anti-competitive coordination.

“The AAAI and its members are in contravention of the Act,” the document states, referring to the Competition Act, 2002.

Post-raid advisory under scanner

The allegations have become particularly damaging because they strike at the core positioning of the AAAI as an institution representing professional standards, ethical conduct and industry development since its inception in 1945.

Ironically, shortly after the raids, the AAAI circulated an internal advisory to member agencies warning them against discussing pricing, market allocation, output quotas, tender participation or any other commercially sensitive subjects through WhatsApp groups, emails, meetings or informal industry forums.

The advisory also instructed members to immediately disassociate themselves from existing WhatsApp groups where business-sensitive discussions may have occurred.

According to a senior official representing the CCI, the post-raid advisory has itself become an important piece of evidence of the investigation.

“The investigations by the Director General, statements recorded from media agency executives, WhatsApp conversations, and the advisory issued by AAAI after the raids clearly indicate the association’s prominent role in the alleged media cartelisation,” the official told e4m.

Competition law experts flag AAAI role

Legal experts tracking competition law cases say trade associations increasingly face scrutiny when they become platforms for coordination among competitors.

Aniket Ghosh, Partner at King Stubb & Kasiva, said the CCI typically relies on both documentary evidence and circumstantial patterns to establish cartel behaviour.

“The DG typically relies on a combination of documentary and circumstantial material, circulars, advisories, model agreements, meeting minutes, internal emails and WhatsApp chats between office-bearers and member firms, and any data-sharing arrangement run by the association,” Ghosh said.

He pointed to the landmark tyre cartel case to explain the regulator’s evolving standards of proof.

“The CCI has held, most clearly in the tyre cartel decision, that the absence of a written agreement is no defence. Parallel conduct combined with ‘plus factors’ like an industry forum and opportunities to meet is enough to infer concerted action,” he added.

Earlier precedents weigh on the case

The ongoing probe has revived memories of some of India’s biggest competition law cases involving trade bodies.

One of the most significant precedents remains the Builders Association of India versus Cement Manufacturers’ Association case, where the CCI penalised 11 cement companies and the industry association itself for allegedly exchanging pricing and production information. 

Similarly, in the 2018 tyre cartel order, the regulator penalised five tyre manufacturers and the Automotive Tyre Manufacturers Association for facilitating real-time data exchange related to production and pricing.

The regulator has also cracked down on pharmaceutical trade bodies in states including West Bengal, Goa and Madhya Pradesh over restrictive trade practices and stockist appointment norms.

However, legal experts caution that the outcome of the AAAI matter is far from certain.

“The case will ultimately turn on whether AAAI’s guidelines were merely advisory, or whether they functioned as a coordinated commercial standard the industry was expected to observe,” legal experts said, referring to previous cases where appellate authorities overturned CCI findings due to insufficient evidence.

Farida Dholkawala, Partner at Desai & Diwanji, said the regulator has increasingly examined industry associations under the “hub-and-spoke” cartel framework.

“Even where an industry body is not itself a direct competitor, it may still face scrutiny if it is found to have enabled coordination or exchange of commercially sensitive information among competitors,” she said.

Sonam Chandwani, Managing Partner at KS Legal & Associates, said the CCI’s actions signal a broader shift in India’s competition enforcement landscape.

“The CCI is no longer looking only for written cartel agreements. Even informal coordination through industry associations can attract scrutiny if it influences pricing, commissions, media buying strategies or collective market behaviour,” Chandwani said.

AAAI denies facilitating cartelisation

For its part, the AAAI has denied wrongdoing.

Srinivasan Swamy, president of AAAI, said the association had fully cooperated with investigators but refrained from commenting on specifics as the matter remains sub judice.

“All we can say is that we fully cooperated with the officials involved. We assumed they had the authority to carry out their duties,” Swamy said.

Rejecting allegations that the association facilitated cartelisation, he added: “AAAI secretariat assists various committees of AAAI in organising periodic meetings including board meetings. AAAI has not played any role of facilitator to enable cartelisation.”

Swamy further said the association had neither submitted any formal statement to the CCI nor received any communication from the regulator alleging wrongdoing after the searches conducted last year.

Milestone year overshadowed by scrutiny

Yet, even as the legal process continues, the reputational implications for AAAI are becoming difficult to ignore.

The association’s 80-year milestone was expected to be a celebratory moment marking the evolution of Indian advertising from print-led campaigns to a sophisticated digital and media ecosystem. Instead, the anniversary risks becoming overshadowed by questions around governance, transparency and whether industry associations have crossed the line between representation and coordination.

For an organisation that has long positioned itself as the voice of Indian advertising, the outcome of the CCI investigation may ultimately determine whether its legacy remains intact — or permanently altered by one of the most consequential competition law probes the media and advertising industry has faced in recent years.