The Fair Trade Commission (FTC) has begun reviewing the dispute between EXO members Chen, Baekhyun, Xiumin and their agency, SM Entertainment.
According to sources on the 8th of June, the FTC has assigned the case filed by Chen, Baekhyun, and Xiumin against SM Entertainment for “abuse of market dominance” to the Seoul Office.
The law firm representing Chen, Baekhyun, and Xiumin, called Lin, reported SM Entertainment to the FTC for abusing its market dominance through the Electronic Petition System on the 4th.
The three members of EXO are raising concerns about their exclusive contract, which was signed before their debut and has a longer duration compared to contracts in the industry, as well as the extension of the contract period due to reasons such as overseas activities.
Currently, the three EXO members argue that their contract period of up to 17-18 years is unfair. However, SM Entertainment maintains that it faithfully follows the standard exclusive contract template recommended by the FTC and the Ministry of Culture, Sports and Tourism, stating that there are no issues with the contracts.
The FTC has mainly handled disputes over exclusive contracts with entertainers through the Seoul Office of Competition. The current case has been assigned to the Seoul Office. However, considering the significance of the dispute involving popular K-pop group members, there is a possibility that the case may be transferred to the FTC headquarters.
When it comes to FTC reports, the relevant local office where the accused party’s main office is located handles the case. Cases involving corporate mergers, unfair support, interagency referrals, nationwide impact, and multiple complaints are handled by the headquarters in Sejong. It is expected that the Seoul Office and the headquarters will consult with each other to determine the final procedure for handling the case.
An FTC official stated that even if the company claims to have followed the standard contract template, they can examine the specific provisions (regarding fairness) and emphasized that they need to start by understanding the details of the case.