1 00:00:00,080 --> 00:00:02,920 Speaker 1: Now it's time for our daily Bloomberg Law Brief, exploring 2 00:00:03,040 --> 00:00:05,560 Speaker 1: legal issues in the news. And Today Bloomberg Law hoos 3 00:00:05,600 --> 00:00:09,320 Speaker 1: student Rosso and Greg Store discussed a Department of Justice 4 00:00:09,360 --> 00:00:14,240 Speaker 1: investigation into advertising giant WPP. They speak with Daniel Crane, 5 00:00:14,240 --> 00:00:16,840 Speaker 1: a professor at the University of Michigan Law School, and 6 00:00:16,920 --> 00:00:21,799 Speaker 1: Jennifer Ree, a senior litigation analyst for Bloomberg Intelligence. Jen 7 00:00:21,800 --> 00:00:25,560 Speaker 1: there have been years of tensions between big advertisers and 8 00:00:25,600 --> 00:00:30,319 Speaker 1: their ad agencies. Was this investigation by Justice propelled in 9 00:00:30,360 --> 00:00:34,040 Speaker 1: any way by a June study commissioned by the Association 10 00:00:34,080 --> 00:00:37,760 Speaker 1: of National Advertisers. What's been reported, at least we think 11 00:00:37,920 --> 00:00:41,159 Speaker 1: is that a report by this UM, this company K 12 00:00:41,360 --> 00:00:44,960 Speaker 1: two that was commissioned by the Association of National Advertisers. 13 00:00:44,960 --> 00:00:47,960 Speaker 1: This is a trade association that represents the brand companies 14 00:00:47,960 --> 00:00:51,800 Speaker 1: of the advertisers. UM suggested that there was a lot 15 00:00:51,840 --> 00:00:55,400 Speaker 1: of non transparent activity going on in these ad agencies 16 00:00:55,400 --> 00:00:58,880 Speaker 1: that wasn't really working out to the benefit of the advertisers, 17 00:00:58,880 --> 00:01:00,840 Speaker 1: but working out to the benefit of the agencies. And 18 00:01:00,880 --> 00:01:04,480 Speaker 1: it seems that they mostly we're focusing on media companies, 19 00:01:04,480 --> 00:01:07,760 Speaker 1: media suppliers, but and not so much production, which is 20 00:01:07,800 --> 00:01:10,160 Speaker 1: what the DJ is looking at here, but that they 21 00:01:10,160 --> 00:01:12,600 Speaker 1: did have some findings that might not have fallen into 22 00:01:12,640 --> 00:01:16,679 Speaker 1: their final report that suggested there may be this kind 23 00:01:16,720 --> 00:01:20,160 Speaker 1: of bid rigging activity going on in which the ad 24 00:01:20,200 --> 00:01:23,840 Speaker 1: agencies agree with some of these outside production companies not 25 00:01:23,920 --> 00:01:26,959 Speaker 1: to compete essentially UM and try to get the business 26 00:01:27,040 --> 00:01:29,720 Speaker 1: in house because they own some of their own production 27 00:01:29,760 --> 00:01:32,679 Speaker 1: facilities in house. Daniel Crane. Some of if I understand 28 00:01:32,680 --> 00:01:35,959 Speaker 1: this correctly, is the idea that there are separate markets 29 00:01:35,959 --> 00:01:40,280 Speaker 1: for the advertising contracts UH in general and for the 30 00:01:40,400 --> 00:01:43,320 Speaker 1: video productions, so that if an AD agency gets a 31 00:01:43,319 --> 00:01:47,319 Speaker 1: contract it can't necessarily use its own production facilities. Is 32 00:01:47,360 --> 00:01:50,480 Speaker 1: that the idea right? So, the idea is that there 33 00:01:50,600 --> 00:01:53,520 Speaker 1: is a separate market for the production of advertisements, and 34 00:01:53,600 --> 00:01:57,400 Speaker 1: that can be done by the vertically integrated shop of 35 00:01:57,440 --> 00:02:00,320 Speaker 1: an ad agency or it could be done outside by 36 00:02:00,320 --> 00:02:03,920 Speaker 1: an independent video production company. As I understand it from 37 00:02:03,920 --> 00:02:08,080 Speaker 1: media reports, the investigation is centering on allegations that the 38 00:02:08,160 --> 00:02:11,120 Speaker 1: ad agencies, which already we're dealing with clients to sell 39 00:02:11,200 --> 00:02:15,680 Speaker 1: advertising UH in media, had some sort of a kickback 40 00:02:15,800 --> 00:02:19,840 Speaker 1: or collusive agreement with independent video production companies that the 41 00:02:19,919 --> 00:02:24,639 Speaker 1: video production companies would submit bogus bids to the client, 42 00:02:24,880 --> 00:02:26,920 Speaker 1: and that the ad agency would therefore be able to 43 00:02:26,960 --> 00:02:30,040 Speaker 1: come in and win the business for its own in 44 00:02:30,200 --> 00:02:33,960 Speaker 1: house video production shop, but doing so at inflated prices. 45 00:02:34,480 --> 00:02:36,919 Speaker 1: And that's Daniel Crane, a professor at the University of 46 00:02:37,000 --> 00:02:40,520 Speaker 1: Michigan Law School, and Jennifer Ree, a senior litigation analyst 47 00:02:40,560 --> 00:02:44,240 Speaker 1: for Bloomberg Intelligence, speaking with Bloomberg Laho stoom Grosso and 48 00:02:44,280 --> 00:02:46,919 Speaker 1: Greg Sture. You can listen to Bloomberg Law weekdays at 49 00:02:46,919 --> 00:02:50,160 Speaker 1: one pm Wall Street Time here on Bloomberg Radio Now. 50 00:02:50,160 --> 00:02:53,880 Speaker 1: Among the top legal stories from Bloomberg, Bloomberg Law, judges 51 00:02:53,919 --> 00:02:57,840 Speaker 1: granted preliminary approval to President elect Donald Trump's twenty five 52 00:02:57,919 --> 00:03:01,680 Speaker 1: million dollars settlement with former Trump University students. The former 53 00:03:01,680 --> 00:03:05,200 Speaker 1: students claimed they were defrauded by the university. The settlement 54 00:03:05,200 --> 00:03:07,480 Speaker 1: will reimburse them about half of what they paid for 55 00:03:07,520 --> 00:03:10,839 Speaker 1: the real estate seminars. The judge says that's fair, inadequate, 56 00:03:11,600 --> 00:03:14,040 Speaker 1: And that's this morning's Bloomberg Law Brief. You can find 57 00:03:14,040 --> 00:03:17,000 Speaker 1: more legal news at Bloomberg Law dot com and Bloomberg 58 00:03:17,280 --> 00:03:20,560 Speaker 1: na dot com. Attorneys will find exceptional legal research and 59 00:03:20,600 --> 00:03:24,080 Speaker 1: business development tools there as well. Visit bloomberg law dot 60 00:03:24,160 --> 00:03:27,160 Speaker 1: com and bloomberg na dot com for more information.