Japan’s Fair Trade Commission (JFTC) has levied substantial penalties against advertising titan Dentsu and six other agencies and event organizers, totaling 3.3 billion yen (approximately AUD35 million), for their involvement in bid-rigging activities related to the 2020 Tokyo Olympics and Paralympics. Dentsu Group Inc. faces a fine of 495.56 million yen (AUD5.27 million), while its subsidiary Dentsu Inc. has been ordered to pay 425.15 million yen (AUD4.5 million) and received a cease and desist order.
The JFTC’s charges primarily center on alleged bid-rigging in April 2018 concerning the planning of test events for the global sporting spectacle. Furthermore, the commission’s orders extend to identifying violations in the implementation and related operations of these test events, as well as the management and operation of the main Olympic and Paralympic events themselves.
Dentsu Group Inc. confirmed receipt of the payment order under Japan’s Antimonopoly Act, with Dentsu Inc. receiving both a cease and desist order and a surcharge payment order. The company stated it had “fully cooperated” with authorities since investigations commenced in November 2022 into suspected Antimonopoly Act violations.
In a recent statement, Dentsu acknowledged legal transgressions specifically linked to the planning and associated operations for the test events, expressing that they “have taken this matter seriously.” This acknowledgment aligns with findings from an internal review conducted two years prior, which attributed the group’s potential criminal exposure to Olympic contract bid-rigging partly to a “culture of winning at any cost” and a pervasive belief that “results justify everything.”
However, Dentsu has taken a firm stance against certain aspects of the JFTC’s orders. The company stated that the commission’s conclusions regarding the implementation and management of the main event “significantly differ from our understanding” of the facts. Citing these “discrepancies [that] cannot be overlooked,” Dentsu announced its decision to file a lawsuit to seek the revocation of the administrative orders. The company intends to “sincerely present our position in court, aiming for a fair judicial determination.”
Despite the legal action and significant fines, Dentsu Group Inc. anticipates a “minimal” impact of this matter on its consolidated financial result forecast for the current fiscal year. Both Dentsu entities affirmed that they have “reflected deeply and implemented measures to prevent recurrence, including efforts to evolve its organisational culture to prioritise integrity.”
AloJapan.com