EXO-CBX’s Side, “Investigation Began, We Have Proof Of SM Abusing Kakao’s Discriminatory Music Distribution Fees”

On June 12th, EXO-CBX’s side released an official statement, saying “It has been proven that the essence of this incident lies in the discriminatory imposition of music distribution fees and SM’s behavior of abusing it.”

Earlier on the 10th, the Korea Fair Trade Commission (KFTC) launched an on-site investigation into Kakao Entertainment on suspicion of imposing discriminatory music distribution fees. This investigation follows Big Planet Made’s report to the KFTC, requesting an investigation into the circumstances where Kakao Entertainment imposed different distribution fees on its affiliated companies and subsidiaries compared to other agencies.

This coincides with the transcript of SM Entertainment’s CAO Lee Sung-soo released by CBX’s side at their press conference on the same day. The CAO said, “I’ll apply for a music commission rate of 5.5% through Kakao Entertainment”. Big Planet Made has reportedly submitted the information to the KFTC.

CBX’s representative said, “We doubt Kakao Entertainment’s claim that ‘The distribution commission rate is not calculated based on the standard of a company being a Kakao affiliate or not’. Also, SM seems to have also provided evidence proving Kakao’s inappropriate inappropriate practice.”

CBX emphasized that the “essence” of the press conference on the 10th was to correct the issue related to unfair music distribution fees and to let everyone know that SM abused that to urge CBX to renew their contracts unfairly.

CBX said, “After reviewing our reports and evidence, the FTC has launched an investigation and an on-site examination on the 10th. This proves that the act in the report is an issue that cannot be ignored ”, adding “We already disclosed SM’s attempt to abuse such discriminatory distribution fees as a measure to make the artists renew their contracts has been clearly revealed through evidence at the press conference. However, SM is still trying to divert public attention by misleading the essence of the problem”.

In addition, CBX’s side said, “Through the Fair Trade Commission, we plan to actively cooperate by submitting relevant evidence so that the wrongs of this incident will be revealed”, adding “We believe that the Fair Trade Commission will objectively reveal the truth of this incident”.