K-pop Agencies Under Scrutiny at National Assembly Audit for Choreography Copyright Issues and Unfair Album Practices

On October 8, 2024, top executives from YG Entertainment, SM Entertainment, HYBE, and JYP Entertainment were summoned for a hearing by the National Assembly’s Culture, Sports, and Tourism Committee regarding a state audit. The meeting saw the attendance of prominent figures including SM’s CEO Jang Chul-hyuk, YG’s CEO Yang Min-seok, JYP’s CEO Jung Wook, and Choi Jun-won, the CEO of HYBE’s Weverse platform.

The inquiry was centered around widespread issues of copyright infringement concerning choreography and alleged manipulation of album sales prevalent in the K-pop sector. Representatives from the four major agencies assured their commitment to adhering to the choreography copyright framework.

This scrutiny followed accusations from former ADOR CEO Min Hee-jin, who claimed that ILLIT, a rookie girl group under HYBE’s subsidiary Belift Lab, had copied the choreography of NewJeans. Furthermore, she alleged that HYBE was involved in “sajaegi,” a term for inflating album sales, which has sparked broader concerns about bulk purchasing practices within the industry.

During the audit, CEO Jang Cheol-hyun of SM Entertainment emphasized that album sales are conducted through “contracts”with distribution partners. He addressed the National Assembly committee stating,

“We sell albums based on agreements with our distribution associates, and I will return to my team to confirm if there are any valid concerns, as highlighted by the lawmaker.”

Choi Jun-won, representing Weverse, discussed the offering of “Weverse versions”of albums that minimize the distribution of physical copies. He highlighted that this approach not only mitigates instances of “sajaegi”but is also environmentally advantageous.

“Our platform contributes to this effort by providing ‘Weverse Albums’ where music can be accessed via QR codes, eliminating the need for physical CDs. Other entertainment firms are also pursuing similar strategies to promote environmental sustainability.”

JYP’s CEO Jung Wook informed the National Assembly committee that the oversight of K-pop album sales during fansign events is the responsibility of retailers, not the entertainment companies. Representatives from all four agencies confirmed they would investigate their own practices to ensure no “sajaegi”occurrences.

National Assembly Audit Highlights Choreography Copyright Controversy between NewJeans & ILLIT, Calls for Protective Measures

During the state audit session, Shin Dong-wook of the People Power Party (PPP) brought to light the similarities between the choreography of Belift Lab’s ILLIT and that of NewJeans, another HYBE-associated girl group from ADOR. He stated,

“The recent choreography has stirred significant controversy. Upon closer examination, its resemblance to another piece is notable. For people within the industry, this choreography represents crucial content in the current culture. Concerns regarding choreography copyright are indeed legitimate. Are we examining that aspect?”

Jeong Hyang-mi, Director of the Copyright Bureau, responded, confirming ongoing evaluations of choreography copyright issues and the intent to establish comprehensive guidelines by the year’s end. Jeong stated during the audit,

“We have been gathering insights from stakeholders to understand the choreography copyright arena and are conducting relevant research, which we anticipate concluding soon. We plan on releasing a complete guideline by the end of the year.”

Sports Kyunghyang reported that Democratic Party lawmaker Min Hyung-bae probed YG’s CEO Yang Min-seok about the earnings from choreography videos of K-pop groups during the audit.

Yang Min-seok disclosed that each of BLACKPINK’s choreography videos continues to generate hundreds of millions of won for the agency.

National Assembly minister Yoo In-chon and Shin Dong-wook expressed concern over HYBE’s public disputes with Min Hee-jin, dating back to April 2024. This ongoing conflict has unveiled allegations of bulk-buying practices and plagiarism claims. They called on the Copyright Bureau to establish stringent guidelines to safeguard artists against copyright infringement promptly.

Earlier this year, during the Fair Trade Commission’s investigation, Democratic Party lawmaker Kang Yoo-jung noted that all four major K-pop entities—YG Entertainment, SM Entertainment, HYBE, and JYP Entertainment—faced scrutiny and penalties for their unfair refund practices. This issue was also brought to light during the National Assembly’s audit.

In August 2024, The Chosun Daily disclosed that the Fair Trade Commission (FTC) determined these firms had unexpectedly shortened the timeframe allotted for fans to return idol merchandise. According to the law, consumers have a seven-day period post-delivery to decide on returns.

SM Entertainment’s policy disallowed refunds based solely on a “change of mind,”although the law provides for financial claims within three months of the purchase date. Weverse, SM, and JYP maintained policies preventing reimbursement for lost items beyond 30 days from shipment.

Consequently, the FTC issued fines including KRW 3 million ($2,236.09) against Weverse and KRW 2.5 million ($1,863.41) each against SM, YG, and JYP.

All representatives from the four entertainment companies committed to adhering to the forthcoming guidelines once they are finalized, emphasizing their dedication to safeguarding artists and addressing copyright concerns.

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