Japanese advertising giant Dentsu is among six companies hit with fines totaling 3.3 billion yen ($22.8 million) for bid-rigging in advance of the Tokyo 2020 Olympic Games.
The Fair Trade Commission (FTC) on Monday issued fines to multiple advertising agencies and event organizers, including Cerespo, Fuji Creative, Hakuhodo, Same Two, and Tokyu Agency.
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The FTC also found an antitrust law violation by ADK Marketing Solutions, but did not impose a fine on the firm as it self-declared the violation before the watchdog launched its probe.
According to the regulator, these firms rigged bids in April 2018 around contracts to operate test events in advance of Tokyo 2020 (which took place in 2021 because of the Covid-19 pandemic).
Dentsu is alleged to have played a leading role in the anti-competitive practices together with the then-deputy chief of the Tokyo Games organizing committee, who has already been convicted.
Former Dentsu executive Koji Hemmi was also sentenced to two years in jail, suspended for four years.
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By GlobalDataTokyo hosted the Summer Olympics in July and August 2021, and Dentsu was integral in both securing hosting rights and bringing in an array of domestic sponsors, which raised a total of more than $3 billion.
The company has said it will file a lawsuit against the FTC fine and order.
Antitrust trials against Dentsu Group and the other five firms, as well as their officials involved, are now underway.
Earlier this year, Dentsu was fined around $1.94 million for the bid-rigging scandal by a Tokyo court, which it is appealing.
Dentsu became the third company convicted concerning the alleged bid-rigging and has admitted to rigging contracts worth over 500 million yen. However, it has denied collusion in relation to other contracts around the games’ operations.
The Cerespo, Fuji Creative, Hakuhodo, Same Two, and Tokyu Agency were also indicted for collusion around bid-rigging between February and July 2018.
Those indictments came in March 2023, while a month earlier, Dentsu was one of three companies suspended from bidding on certain domestic government contracts amid an ongoing corruption investigation.
Dentsu’s offices were first raided in early 2022 amid allegations of corruption in the awarding of those event contracts.
In 2024, Hakuhodo was fined 200 million yen and Cerespo 280 million yen (although both firms have also appealed).
In late 2022, it was also confirmed that efforts to bring the 2030 Winter Olympics to the Japanese city of Sapporo were being paused (that event has since been allocated to the French Alps) in part because of the ongoing corruption scandal around the Tokyo games.
