WPP Subpoenaed By Justice Department in Ad Probe -- Update

By Suzanne Vranica and Olga Cotaga 

WPP PLC is the latest advertising holding company to disclose that it has been contacted by the U.S. Department of Justice in its investigation of possible price fixing in video-advertising production.

WPP, the world's largest ad company by revenue, on Monday said three of its subsidiaries have received subpoenas form the Justice Department's antitrust division relating to its probe of video production and postproduction practices in the ad industry.

Last week, French advertising giant Publicis Groupe SA and Omnicom Group Inc. of the U.S. each acknowledged that subsidiaries had received subpoenas. Interpublic Group also recently disclosed that it was contacted by the Justice Department's antitrust division "for documents regarding video production practices."

All of the companies said they are cooperating with the investigation.

The Wall Street Journal earlier this month reported that the Justice Department was investigating whether ad agencies inappropriately steered contracts for making commercials to their in-house production units, disadvantaging independent companies.

WPP declined to say which units were involved. The company owns many ad agencies, including J. Walter Thompson, Young & Rubicam and Ogilvy & Mather.

The production and postproduction work on commercials is a roughly $5 billion business in the U.S. and involves services such as directing, sound editing, special effects and color correcting. The sector includes hundreds of small independent companies that often compete for contracts.

Write to Suzanne Vranica at [e-mail] and Olga Cotaga at [e-mail]

(END) Dow Jones Newswires

December 19, 2016 11:24 ET (16:24 GMT)

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