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Representatives of EXO-CBX announced on June 12th that they have gathered proof of SM Entertainment’s misuse of music distribution fees, stating “The crux of this affair is the discriminatory application of music distribution fees by SM, and we have evidence of their exploitative actions.”
The scrutiny by the Korea Fair Trade Commission (KFTC) into Kakao Entertainment began on the 10th of June, due to allegations of the company demanding unfair music distribution fees. This inquiry came about when Big Planet Made provided a report to the KFTC, prompting a look into Kakao Entertainment’s practice of charging varying fees for distribution to its affiliates and subsidiaries, unlike other companies.
Conflicting information emerged when a transcript from a press conference demonstrated the CAO of SM Entertainment, Lee Sung-soo, seemingly discussing a 5.5% commission rate to be levied through Kakao Entertainment. Information that Big Planet Made claims to have provided to the KFTc as part of their submission.
EXO-CBX’s legal team is questioning the validity of Kakao Entertainment’s defenses, also indicating that SM Entertainment might have further corroborated Kakao’s disputed business tactics.
There’s a pointed determination by EXO-CBX to highlight the core issue, which they assert is the unfair music distribution fees being utilized by SM Entertainment as a means to compel artists into contract renewals under unfair terms.
EXO-CBX representatives further remarked, “The initiation of the KFTC’s inquiry and the in-person evaluations conducted on the 10th underscore the significance of the assertions made in our report. There’s a clear indication that there’s an actionable issue at hand,” while highlighting that the evidence they presented at the press conference also strongly indicates SM’s exploitation of the fee situation.
They concluded by expressing their willingness to collaborate with the Fair Trade Commission by providing relevant materials to expose the issues and trusted that the FTC would impartially unveil the truth of the matter.
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Frequently Asked Questions
What is the main accusation against SM Entertainment?
SM Entertainment is accused of abusing discriminatory music distribution fees, allegedly using them to pressure artists into renewing contracts under unfair terms.
Who requested an investigation into Kakao Entertainment?
Big Planet Made requested the Korea Fair Trade Commission to investigate Kakao Entertainment on suspicions of imposing discriminatory fees which vary for affiliates compared to other agencies.
What evidence has reportedly been submitted to the KFTC?
A transcript from SM Entertainment’s CAO discussing a distribution commission rate, among other proofs, has been submitted by Big Planet Made to the KFTC.
Has the KFTC taken action against Kakao Entertainment?
Yes, the KFTC has initiated an on-site investigation into Kakao Entertainment following the report from Big Planet Made.
What is EXO-CBX’s stance regarding the investigation?
EXO-CBX’s representatives have expressed their support for the investigation and plan to provide evidence to assist in the revelation of the alleged wrongdoings.
