A new filing in a lawsuit from a fired WPP executive alleges that Sony, one of the ad giant’s major partners, investigated the company and concluded it had improperly withheld rebates from clients.
The lawsuit says that Sony presented the findings of its investigation to WPP in 2025 in a detailed analysis that said the ad agency giant operated what Sony called a “global crime scheme” across several markets, including China.
The allegations have high stakes for WPP, which handles tens of billions of dollars in ad spending for some of the world’s largest companies. At its core, the lawsuit alleges WPP put its own interests ahead of its clients’, engineering a way to use some of their advertising budgets to maximize its own profits without their consent.
The lawsuit says that Sony’s investigation alleged this is how the practice worked:
- WPP’s media investment arm, GroupM, would negotiate a rebate deal with a media owner by leveraging its clients’ combined advertising spending.
- WPP used a network of “intermediary brokers” to hold some of the rebates for itself rather than dispersing them to clients.
- WPP used rebate funds to subsidize the cost of ad inventory, then kept the resulting margin as profit that was shielded from audits.
The lawsuit contains a purported slide from Sony’s presentation to WPP titled “impact for WPP Advertisers — China 2024,” which claims that approximately $110 million was passed back to clients that year, while $350 million remained in its rebate pool “for later utilization” by WPP.
A separate purported Sony slide described the practice as a “fraud scheme” run in China and other markets, and attributed its design to senior global WPP executives.
Sony drew its findings from the work of independent investigators who attended a criminal trial in China involving WPP executives and from interviews with former WPP and GroupM executives, the lawsuit says. GroupM was rebranded to WPP Media last year.
The lawsuit says Sony supported its findings with “contractual language regarding rebate policies, transaction-level financial reporting, internal emails regarding rebate amounts, and documentation of WPP tracking systems.”
A Sony spokesperson said the company does not comment on pending litigation.
The new details are part of a lawsuit filed in November by Richard Foster, a former longtime GroupM executive. In the lawsuit, he accuses the company of retaliating against him and firing him after he raised concerns that the group’s media investment division was allegedly running an improper global kickback operation.
WPP filed a motion to dismiss the lawsuit, arguing that Foster failed to state a legally sufficient claim while also objecting on jurisdictional grounds. The suit is ongoing.
WPP declined to comment on the alleged Sony review and said in a statement that Foster’s amended complaint, filed days prior to an upcoming court hearing, is an attempt to avoid the case’s dismissal.
“Both complaints are baseless and without merit, and WPP will be re-filing an updated motion to dismiss,” WPP said. “We have confidence that this matter will be resolved through due legal process.”
Foster alleged in the lawsuit that the operation was not confined to China and was deployed as part of a global model through which GroupM improperly retained roughly $1.5 billion to $2 billion in profits from rebate deals over five years, by his estimation.
The amended complaint says Sony’s investigative findings corroborated “years of whistleblowing” from Foster, who is seeking at least $100 million in damages from WPP.
In the latest filing, Foster says he refused a “seven-figure termination package which included an obligation of silence regarding the company’s undisclosed rebate practices.”
The ad industry’s heated ‘principal media’ debate
Media rebates are not inherently illegal, though they can raise transparency and accounting issues if they are not properly disclosed. A US ad industry trade group previously warned that rebates could amount to a breach of contract or fraud if not disclosed to the client or if advertisers were deceived about the practice.
Some markets, including China, are heavily reliant on media rebates and the use of brokers to facilitate them.
The prevalence of “proprietary media” agency models, commonly referred to as “principal media,” has long been a divisive topic in the ad industry. They tend to take the form of agencies purchasing a large volume of media at a discount, reselling it to their clients, and making a margin on that resale.
Agencies argue that principal media is often more cost-effective for their clients than buying ad inventory themselves — and that CMOs are happy to participate so long as it performs well. Critics say the model — even when it’s disclosed — can create conflicts of interest for agencies, which could be incentivized to steer marketers toward media the agency has already bought, rather than the inventory best suited to their clients’ campaign objectives.
Advisory and consulting firm Madison and Wall recently estimated that principal media accounts for a “high single-digit or low double-digit” share of large-brand and agency activity in the US.
“Richard Foster asked a question any agency should be prepared to answer: Are your profits derived from loyal service to your clients, or not?” William A. Brewer III, partner at Brewer, Attorneys & Counselors and lead counsel to Foster, said in a statement.
WPP’s media operations in China have already faced significant legal scrutiny. Earlier this year, Di Fei, the former GroupM China chief investment officer, was sentenced to life in prison for taking bribes totaling $176 million with his ex-colleagues, Bloomberg reported. Di Fei is appealing the ruling, Bloomberg reported in June.
WPP has said it is aware of the court’s sentencing of its former employees in China and has cooperated fully with the relevant authorities.
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