WEBVTT - Bloomberg Law Brief: WPP Under Antitrust Investigation (Audio)

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<v Speaker 1>Now it's time for our daily Bloomberg Law Brief, exploring

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<v Speaker 1>legal issues in the news. And Today Bloomberg Law hoos

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<v Speaker 1>student Rosso and Greg Store discussed a Department of Justice

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<v Speaker 1>investigation into advertising giant WPP. They speak with Daniel Crane,

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<v Speaker 1>a professor at the University of Michigan Law School, and

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<v Speaker 1>Jennifer Ree, a senior litigation analyst for Bloomberg Intelligence. Jen

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<v Speaker 1>there have been years of tensions between big advertisers and

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<v Speaker 1>their ad agencies. Was this investigation by Justice propelled in

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<v Speaker 1>any way by a June study commissioned by the Association

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<v Speaker 1>of National Advertisers. What's been reported, at least we think

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<v Speaker 1>is that a report by this UM, this company K

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<v Speaker 1>two that was commissioned by the Association of National Advertisers.

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<v Speaker 1>This is a trade association that represents the brand companies

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<v Speaker 1>of the advertisers. UM suggested that there was a lot

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<v Speaker 1>of non transparent activity going on in these ad agencies

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<v Speaker 1>that wasn't really working out to the benefit of the advertisers,

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<v Speaker 1>but working out to the benefit of the agencies. And

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<v Speaker 1>it seems that they mostly we're focusing on media companies,

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<v Speaker 1>media suppliers, but and not so much production, which is

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<v Speaker 1>what the DJ is looking at here, but that they

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<v Speaker 1>did have some findings that might not have fallen into

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<v Speaker 1>their final report that suggested there may be this kind

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<v Speaker 1>of bid rigging activity going on in which the ad

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<v Speaker 1>agencies agree with some of these outside production companies not

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<v Speaker 1>to compete essentially UM and try to get the business

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<v Speaker 1>in house because they own some of their own production

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<v Speaker 1>facilities in house. Daniel Crane. Some of if I understand

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<v Speaker 1>this correctly, is the idea that there are separate markets

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<v Speaker 1>for the advertising contracts UH in general and for the

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<v Speaker 1>video productions, so that if an AD agency gets a

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<v Speaker 1>contract it can't necessarily use its own production facilities. Is

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<v Speaker 1>that the idea right? So, the idea is that there

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<v Speaker 1>is a separate market for the production of advertisements, and

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<v Speaker 1>that can be done by the vertically integrated shop of

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<v Speaker 1>an ad agency or it could be done outside by

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<v Speaker 1>an independent video production company. As I understand it from

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<v Speaker 1>media reports, the investigation is centering on allegations that the

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<v Speaker 1>ad agencies, which already we're dealing with clients to sell

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<v Speaker 1>advertising UH in media, had some sort of a kickback

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<v Speaker 1>or collusive agreement with independent video production companies that the

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<v Speaker 1>video production companies would submit bogus bids to the client,

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<v Speaker 1>and that the ad agency would therefore be able to

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<v Speaker 1>come in and win the business for its own in

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<v Speaker 1>house video production shop, but doing so at inflated prices.

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<v Speaker 1>And that's Daniel Crane, a professor at the University of

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<v Speaker 1>Michigan Law School, and Jennifer Ree, a senior litigation analyst

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<v Speaker 1>for Bloomberg Intelligence, speaking with Bloomberg Laho stoom Grosso and

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<v Speaker 1>Greg Sture. You can listen to Bloomberg Law weekdays at

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<v Speaker 1>one pm Wall Street Time here on Bloomberg Radio Now.

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<v Speaker 1>Among the top legal stories from Bloomberg, Bloomberg Law, judges

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<v Speaker 1>granted preliminary approval to President elect Donald Trump's twenty five

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<v Speaker 1>the real estate seminars. The judge says that's fair, inadequate,

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<v Speaker 1>And that's this morning's Bloomberg Law Brief. You can find

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<v Speaker 1>more legal news at Bloomberg Law dot com and Bloomberg

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<v Speaker 1>na dot com. Attorneys will find exceptional legal research and

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<v Speaker 1>business development tools there as well. Visit bloomberg law dot

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<v Speaker 1>com and bloomberg na dot com for more information.