WPP loses account, and court case

James McGrath
By James McGrath | 12 November 2014

WPP-owned GroupM has lost out on its bid to stop the UK Government account moving to Carat, but has told media that the war is not yet over.

As previously reported, the unit filed a suit in the High Court in London to challenge the UK Government's decision to award its media account to Carat earlier this year, citing irregularities in the pitching process.

However, the High Court has ruled against GroupM with the court ruling the business should go to Carat.

According to the Financial Times, WPP said it was disappointed by the result but signalled it would take the matter further.

“We maintain there have been several errors in the [tender] process and we strongly believe that the award does not deliver the best deal for UK taxpayers,” the company was quoted as saying. “As the litigation will continue, notwithstanding this decision, it would be inappropriate to comment further.”

In response to the court result, the UK Government said the Carat deal would end up saving the taxpayer £100 million over the course of the four-year contract.

“With a continued focus on ensuring value for money for taxpayers, the success of our campaigns, which affect the lives of millions of people and communities throughout the UK, depend strongly on the competitive rates achieved under this agreement and we look forward to working with Carat over the next four years,” UK spokesperson Alex Aiken said in a statement.

However GroupM argued that given the two groups' market shares, Carat simply could not have offered a “sustainable” price that would be below GroupM's offer. Hence it said the offer breached government rules and should not have been accepted.

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