Speaker 1: Now it's time for our daily Bloomberg Law Brief, exploring
Speaker 1: legal issues in the news. And Today Bloomberg Law hoos
Speaker 1: student Rosso and Greg Store discussed a Department of Justice
Speaker 1: investigation into advertising giant WPP. They speak with Daniel Crane,
Speaker 1: a professor at the University of Michigan Law School, and
Speaker 1: Jennifer Ree, a senior litigation analyst for Bloomberg Intelligence. Jen
Speaker 1: there have been years of tensions between big advertisers and
Speaker 1: their ad agencies. Was this investigation by Justice propelled in
Speaker 1: any way by a June study commissioned by the Association
Speaker 1: of National Advertisers. What's been reported, at least we think
Speaker 1: is that a report by this UM, this company K
Speaker 1: two that was commissioned by the Association of National Advertisers.
Speaker 1: This is a trade association that represents the brand companies
Speaker 1: of the advertisers. UM suggested that there was a lot
Speaker 1: of non transparent activity going on in these ad agencies
Speaker 1: that wasn't really working out to the benefit of the advertisers,
Speaker 1: but working out to the benefit of the agencies. And
Speaker 1: it seems that they mostly we're focusing on media companies,
Speaker 1: media suppliers, but and not so much production, which is
Speaker 1: what the DJ is looking at here, but that they
Speaker 1: did have some findings that might not have fallen into
Speaker 1: their final report that suggested there may be this kind
Speaker 1: of bid rigging activity going on in which the ad
Speaker 1: agencies agree with some of these outside production companies not
Speaker 1: to compete essentially UM and try to get the business
Speaker 1: in house because they own some of their own production
Speaker 1: facilities in house. Daniel Crane. Some of if I understand
Speaker 1: this correctly, is the idea that there are separate markets
Speaker 1: for the advertising contracts UH in general and for the
Speaker 1: video productions, so that if an AD agency gets a
Speaker 1: contract it can't necessarily use its own production facilities. Is
Speaker 1: that the idea right? So, the idea is that there
Speaker 1: is a separate market for the production of advertisements, and
Speaker 1: that can be done by the vertically integrated shop of
Speaker 1: an ad agency or it could be done outside by
Speaker 1: an independent video production company. As I understand it from
Speaker 1: media reports, the investigation is centering on allegations that the
Speaker 1: ad agencies, which already we're dealing with clients to sell
Speaker 1: advertising UH in media, had some sort of a kickback
Speaker 1: or collusive agreement with independent video production companies that the
Speaker 1: video production companies would submit bogus bids to the client,
Speaker 1: and that the ad agency would therefore be able to
Speaker 1: come in and win the business for its own in
Speaker 1: house video production shop, but doing so at inflated prices.
Speaker 1: And that's Daniel Crane, a professor at the University of
Speaker 1: Michigan Law School, and Jennifer Ree, a senior litigation analyst
Speaker 1: for Bloomberg Intelligence, speaking with Bloomberg Laho stoom Grosso and
Speaker 1: Greg Sture. You can listen to Bloomberg Law weekdays at
Speaker 1: one pm Wall Street Time here on Bloomberg Radio Now.
Speaker 1: Among the top legal stories from Bloomberg, Bloomberg Law, judges
Speaker 1: granted preliminary approval to President elect Donald Trump's twenty five
Speaker 1: million dollars settlement with former Trump University students. The former
Speaker 1: students claimed they were defrauded by the university. The settlement
Speaker 1: will reimburse them about half of what they paid for
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Speaker 1: And that's this morning's Bloomberg Law Brief. You can find
Speaker 1: more legal news at Bloomberg Law dot com and Bloomberg
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