IPG Domestic Agency Contacted by Justice Department Over Production Contracts

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Interpublic Group put out a statement Wednesday confirming that one of the holding company's standalone domestic agencies has been contacted by the Department of Justice Antitrust Division regarding production practices.

The holding company said in the statement that it is cooperating with the government. Representatives from IPG will not disclose which domestic agency is being reviewed.

"The policies in our company's Code of Conduct require that we do business in a manner that is fully consistent with the best interests of our clients -- in the case of production, that means requiring triple bids on all projects above a minimal dollar threshold," the statement reads, adding that IPG holds itself to "the highest standards of ethics and transparency."

Some of IPG's agencies include MullenLowe, Deutsch, McCann, Campbell Ewald, FCB, Carmichael Lynch, Hill Holliday and The Martin Agency.

IPG's statement follows a report from the The Wall Street Journal Monday that said the Department of Justice launched an investigation into whether ad agencies have been unfairly directing production business to their in-house departments over independent shops.

Rebecca Meiklejohn, an antitrust attorney for the Justice Department, was cited in the Journal story as interviewing ad industry professionals on the matter.

Representatives from WPP and Omnicom declined to comment on whether or not they've been contacted by the Justice Department. Publicis Groupe representatives were not immediately available for comment.

According to a report from Pivotal Research Group obtained by Ad Age, it is "difficult to assess" how much of an impact the investigation will have on public agency holding companies.

"While we would not be surprised to learn that such practices have occurred on an ad hoc basis or on a limited basis, we would be surprised if this issue turned out to be systemic and widespread," the Pivotal report reads. "We also note that a mitigating factor could be the notion of the 'complicit client' where day-to-day clients are generally aware of problematic practices, but choose to accept them because of the ease with which overall budgets can be managed when those practices occur."

The report added that holding company stocks fell on Tuesday after news of the investigation came out.

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