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Interpublic says U.S. government sought video production data

By Tim Baysinger and Aishwarya Venugopal

NEW YORK (Reuters) - Interpublic Group of Cos, one of the world's biggest advertising companies, said on Wednesday that the U.S. Justice Department had asked one of its standalone domestic agencies for documents regarding video production practices.

It disclosed the request a day after the Wall Street Journal reported that the Justice Department's Antitrust Division was examining whether advertising agencies rigged bids to favor in-house production units, citing people familiar with the matter. (http://on.wsj.com/2h1OMbV).

That story did not identify which advertising firms were being scrutinized in the investigation, which it said has been under way for the past few months.

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"We can confirm that one of our standalone domestic agencies has been contacted by the Department of Justice Antitrust Division for documents regarding video production practices and is cooperating with the government," Interpublic said in a statement.

Justice Department officials could not immediately be reached for comment.

A spokesman for WPP Plc, the world's biggest advertising firm, declined to say if the firm had been contacted by the Justice Department. Representatives with Omnicom Group Inc, and Publicis Group SA could not immediately be reached.

The Wall Street Journal report said the government is investigating whether agencies compelled independent production companies to inflate their prices to make it easier for their own in-house units to be awarded those contracts.

They are trying to determine whether the company violated federal antitrust laws that prohibit bid rigging and price fixing, the newspaper reported.

Interpublic's statement said its code of conduct requires it act in the best interests of clients. "In the case of production, that means requiring triple bids on all projects above a minimal dollar threshold,” it said.

Interpublic’s shares were up 0.6 percent at $23.40 in midday trade.

Large advertising companies have ramped up their own production efforts in recent years as a way to grow new revenue streams and keep up with advertisers’ increasing demand for video content.

(Reporting by Aishwarya Venugopal in Bengaluru and Tim Baysinger in New York; Additional reporting by Joel Schectman in Washington)

 
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