Publicis-Omnicom Merger May Raise Antitrust Concerns

The merger of Publicis and Omnicom to form the world's largest ad conglomerate is bound to raise more than a few eyebrows in Washington where regulators could add conditions to or even block the proposed $35 billion deal.

Though the holding companies' respective CEOs have said they don't expect regulatory hurdles, the numbers suggest otherwise—the combined companies would control 40 percent of U.S. media spending and 20 percent of the global market. "If it creates too much buying power, it can be anti-competitive," said Bert Foer, president of the American Antitrust Institute. Large, advertising-dependent media companies have the most to lose in the deal, facing a behemoth of a media-buying concern with enormous clout when it comes to setting advertising rates. They could even be motivated to try to block the deal. "Media owners and national TV programmers in particular would face an industry where the combined entity plus WPP would account for more than two-thirds of their revenues," Brian Wieser, an analyst with Pivotal Research Group, pointed out in a report. Not all observers think the newly formed entity's buying power will be an issue with regulators, however.