EXO-CBX’s Allegations Against SM Entertainment: Evidence of Kakao’s Discriminatory Music Distribution Fees Revealed

On June 12th, a statement was released by EXO-CBX’s representatives stating that the core issue of this incident is rooted in discriminatory music distribution fees and SM’s exploitation of them.

On the 10th, the Korea Fair Trade Commission (KFTC) initiated an on-site inspection of Kakao Entertainment after receiving a report from Big Planet Made. The report alleged that Kakao Entertainment had charged discriminatory music distribution fees to its affiliated companies and subsidiaries, and requested an investigation into the matter.

On the same day, CBX’s side released the transcript of SM Entertainment’s CAO Lee Sung-soo, which aligns with the statement made by the CAO at their press conference. According to the CAO, they will be applying for a music commission rate of 5.5% through Kakao Entertainment. It has been reported that Big Planet Made has provided this information to the KFTC.

CBX’s spokesperson expressed skepticism towards Kakao Entertainment’s statement that “The distribution commission rate is not determined by whether a company is affiliated with Kakao or not.”Additionally, they noted that SM has also presented proof of Kakao’s alleged misconduct.

CBX emphasized that the main focus of the press conference on the 10th was to address the issue of unfair music distribution fees and to inform the public that SM had used this as leverage to pressure CBX into renewing their contracts unfairly.

After thoroughly reviewing our reports and evidence, CBX announced that the FTC has initiated an investigation and conducted an on-site examination on the 10th. This serves as confirmation that the issue outlined in our report cannot be disregarded. CBX further stated that at the press conference, they had already exposed evidence of SM’s attempt to exploit discriminatory distribution fees in order to pressure artists into renewing their contracts. However, SM continues to deflect attention by distorting the true nature of the problem.

Moreover, CBX’s representatives stated, “We intend to offer full cooperation to the Fair Trade Commission by providing necessary evidence in order to expose the wrongdoing of this incident.”They also expressed their confidence in the Fair Trade Commission’s ability to impartially uncover the truth behind this incident.