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[Alpha Biz=(Chicago) Reporter Paul Lee] The Seoul Metropolitan Office of the Fair Trade Commission has received and is reviewing the case over allegations of unfair contracts by SM Entertainment, an agency reported by three members of the group "EXO."
According to related ministries and agencies on the 5th, the Seoul Metropolitan Office of the Fair Trade Commission received reports from so-called "Chenbaek City" EXO members such as Baekhyun (Byeon Baek-hyun), Xi Woo-min (Kim Min-seok) and Chen (Kim Jong-dae).
Lee Jae-hak, a legal representative, said, "On behalf of my client, I filed a complaint with the Fair Trade Commission against SM's 'abuse of trading status' through the electronic application of Kookmin Sinmungo as of the previous day."
Abuse of trading status is a type of unfair trade practice under the "Act on Monopoly Regulation and Fair Trade (Fair Trade Act)," in which a business operator unfairly uses its trading status and deals with the other party.
The parts that the three members of EXO took issue with the contract are that they set the starting point of the contract period of the exclusive contract △ (signed before their debut) as their debut date △ The longer contract period compared to other agencies in the same industry △ the application of the extended contract period for reasons such as overseas expansion.
EXO members requested a strict investigation into SM's violation of the law and prompt corrective measures to correct it. It also raised the need for a full investigation into the exclusive contracts of SM celebrities.
The lawyer explained that SM had a seven-year period in the main body of the exclusive contract and three years in the attached agreement, but applied a uniformly extended contract period for reasons such as overseas expansion, which was not finalized at the time of signing the contract.
In particular, he pointed out that the FTC's corrective order in the past was also violated. "Through the complaint, we reported that unfair contract acts that ignored the corrective order had taken place in SM, even though the FTC had already issued corrective orders against SM twice in October 2007 and January 2011," he said.
In 2011, the Fair Trade Commission warned SM Entertainment of unfair exclusive contracts with celebrities and trainees and ordered corrective actions for uniformly extending contracts with trainees on a three-year basis.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
