NewJeans’ Danielle Sparks Fair Trade Commission Investigation into K-pop Contract Practices

South Korea’s Fair Trade Commission (KFTC) is conducting a formal investigation into K-pop company HYBE and its subsidiary ADOR. This follows a complaint filed by NewJeans’ Danielle, who alleged unfair treatment under her contract. The complaint requested an examination of whether the standard contract structures used across the entire K-pop industry are fair.

Danielle was sued by ADOR after she was removed from the group NewJeans. Attorney Jung submitted the complaint to the KFTC, and the commission began official investigations on June 4. The core of the complaint is as follows: all five members of NewJeans submitted notices to terminate their contracts with ADOR, yet ADOR only terminated Danielle’s contract while maintaining contracts with the remaining four members. Furthermore, ADOR continues to pursue damages and fines against Danielle.

The amount of damages claimed by ADOR amounts to approximately 3.3 billion won. However, if all provisions of the contract are applied, claims could exceed 10 billion won. This situation stems from the standard contract structure in the K-pop industry. According to the standard contract template issued by South Korea’s Ministry of Culture, Sports and Tourism, an artist who terminates a contract must compensate for the total earnings from the remaining contract period, based on earnings rather than the agency’s actual losses.

Jung argued that this structure is inherently unfair. For successful groups like NewJeans, the agency’s actual losses are typically between one-quarter and one-tenth of their earnings. Nevertheless, requiring compensation for all earnings equates to imposing “infinite responsibility,” he claimed. What is more serious is that such contract clauses are used as standards by almost all agencies in the K-pop industry. He argued that it is necessary to assess whether these industry-wide contractual practices violate antitrust laws, going beyond individual cases.

In a post published on June 21, Jung strongly criticized ADOR’s intentions behind the lawsuit. He claimed the goal is not merely to secure damages but also to permanently remove Danielle from the market and deter other artists from challenging their contracts. He further argued that this dispute requires examination from an antitrust perspective, going beyond simple contract interpretation.

ADOR stated that it is reviewing internal documents. The KFTC’s investigation focuses on examining the standard contract clauses in South Korea’s popular music industry.