EXO-CBX reacts to Fair Trade Commission's investigation into Kakao Entertainment
What's the story
The Fair Trade Commission's (FTC) official investigation into Kakao Entertainment, an affiliate of SM Entertainment, has sparked a response from the K-pop group EXO-CBX.
The trio has accused their former agency SM Entertainment of "abusing and charging discriminatory music distribution fees."
The investigation was initiated on Monday, following a report by Big Planet Made earlier this year. The report alleged that Kakao Entertainment was unfairly charging music distribution fees.
why-does-it-matter
Why does this story matter?
The controversy began when EXO-CBX, a subunit of the popular K-pop group EXO, announced the termination of their contract with SM last year.
The group cited "unfair distribution of music profits" as the primary reason for their decision.
They claimed that SM Entertainment had been charging them higher distribution fees compared to other agencies.
The trio also alleged that these excessive fees were being used as leverage to pressure them into renewing their contracts.
Allegations
EXO-CBX highlighted SM Entertainment's role in fee dispute
In a statement, EXO-CBX emphasized that the core issue lay with SM Entertainment's actions.
The group stated, "SM has been abusing and charging discriminatory music distribution fees, which was an issue in the previous press conference."
They also pointed out a statement made by SM Entertainment's Chief Administrative Officer Lee Seong-soo, who proposed a 5.5% music commission rate through Kakao Entertainment.
Cooperation
EXO-CBX pledged cooperation with FTC investigation
EXO-CBX has pledged full cooperation with the ongoing FTC investigation.
They stated, "After reviewing our report and evidence, the Fair Trade Commission initiated a formal investigation and began an on-site investigation on June 10, showing that the act in question is a problem that cannot be ignored."
The group had earlier filed a complaint with the FTC, accusing SM of "abuse of superior bargaining position."