Big Planet Made Entertainment has made a statement regarding the commencement of an investigation by the Fair Trade Commission into Kakao Entertainment (Melon).
On the 25th, Big Planet stated, “On the 22nd, we received a ‘Notice of Case Initiation’ (review procedure) from the Fair Trade Commission.”
They continued, “The fact that the Fair Trade Commission has entered into a formal review process indicates that they take seriously the issues we have raised and the supporting evidence we have provided.”
Previously, Big Planet had accused Kakao Entertainment of abusing its dominant position in music distribution fees, charging only its affiliates with lower fees.
Big Planet stated, “In January, we filed a report with the Fair Trade Commission and subsequently submitted objective evidence we had gathered according to the regulations.”
According to Big Planet, Kakao Entertainment charged a distribution fee of around 20% to general companies, while only charging 5-6% to affiliates such as SM Entertainment.
They pointed out that this could constitute an unfair trade practice under the Fair Trade Act. They also mentioned that “we requested Kakao Entertainment to terminate the distribution contract, but they refused.”
The selective measures taken by Kakao Entertainment were also seen as problematic. Around the same time, another music planning company (Company A) was approved for a contract change.
The agency urged, “We demand Kakao Entertainment to clarify its discriminatory decision to approve the contract change with Company A but not with us during the same period.”
They emphasized, “Kakao Entertainment is exercising its dominant market position to engage in abusive practices without consistent standards. We plan to respond strongly.”
Lastly, they stated, “We believe that the truth will be clearly revealed through the Fair Trade Commission’s transparent and thorough investigation. We will cooperate with the investigation to uncover the truth.”
They added, “We will do our utmost to ensure that small and medium-sized planning companies are not harmed by Kakao Entertainment’s discriminatory distribution fees and selective contract changes.”
