Korean Fair Trade Commission to investigate Kakao, HYBE, SME, YGE, JYPE over potential subcontracting law violations

An investigation into allegations of power abuse by the five biggest entertainment companies in Korea has been launched by the Korean Fair Trade Commission. According to Yonhap, investigators have been dispatched to HYBE, SM Entertainment, and YG Entertainment, while according to Seoul Econ Daily they’ve also been dispatched to JYP Entertainment and Kakao.

The investigation isn’t about the contracts of artists, so I’m sure fans won’t care about the result of this, but it’s arguably a worse thing, which is violating the country’s subcontracting law to take advantage of everyday employees and/or part-timers.

The report said government agencies sent “examiners” to the offices of Hybe, SM Entertainment, YG Entertainment, according to a CNBC translation of the article.
Yonhap reported that these companies have allegedly violated the nation’s “subcontracting law,” including using verbal contracts instead of written documents and delaying payment when producing albums and merchandise.

The companies have yet to respond.

When contacted by CNBC, South Korea’s FTC said they could not confirm or deny the Yonhap report. Hybe said that it has no comments, while YG Entertainment and SM Entertainment did not respond to requests seeking comments to the Yonhap report.

While not quoted here, the Seoul Econ Daily mentions JYPE and Kakao are being investigated for the same reasons.


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