EXO-CBX comment on the Fair Trade Commission opening an official investigation into Kakao Entertainment

In relation to the official investigation by the Fair Trade Commission of Kakao Entertainment, an affiliate of SM Entertainment, EXO-CBX made a statement saying, "SM has been abusing and charging discriminatory music distribution fees, which was an issue in the previous press conference. It has been proven that SM Entertainment’s behavior is the essence of this situation.”

 

On June 10, the Fair Trade Commission began an on-site investigation into Kakao Entertainment, which is suspected of discriminatorily charging music distribution fees. This is a measure taken in response to Big Planet Made's report to the Fair Trade Commission early this year, requesting an investigation into the circumstances in which Kakao Entertainment discriminately charges distribution fees between agencies belonging to its affiliates and subsidiaries and other agencies.

This coincides with the transcript of SM Entertainment's CAO Lee Seong Soo released by EXO-CBX, who held a press conference on the same day. In this transcript, this CAO proposes, “We will allow a 5.5% music commission rate to be applied through Kakao Entertainment.” Big Planet Made is said to have already submitted the relevant information to the Fair Trade Commission.

 

EXO-CBX's side stated, "This is something that casts doubt on Kakao Entertainment's claim that 'Whether or not it is a Kakao affiliate is not a consideration at all for calculating distribution commission rates. At the same time, it appears that SM is providing evidence proving Kakao Entertainment's inappropriate practices." 

 

EXO-CBX's side emphasized that the 'essence' of the press conference held on June 10 was to correct the problem of unfair music distribution fees and to raise awareness of SM Entertainment's abuse of this behavior to pressure Chen, Baekhyun, and Xiumin to renew their contracts.