Corruption Exposed Among Leadership of Korean Music Copyright Association... Unjust Collection Under Pretense of “Similar Businesses” and Profits from AI Music Companies

Leadership members of the Korea Music Copyright Association, the country’s largest music copyright trust organization, are under investigation for illegally collecting copyright fees and obtaining unlawful profits through AI music companies. Concerns have risen regarding transparency, as there are accusations that the association has failed to fulfill its core responsibility of protecting creators. As a result of an inspection conducted by the Together Music Copyright Association and the Ministry of Culture, Sports and Tourism, it was revealed that since January 2019, the Korea Music Copyright Association arbitrarily classified regular restaurants equipped with karaoke systems as “similar businesses” internally. It then unjustly imposed high copyright fee rates identical to those applied to entertainment and bar establishments. The term “similar businesses” has no basis in either the Ministry of Culture, Sports and Tourism’s fee collection regulations or the association’s own internal rules. The Korea Music Copyright Association simply collected excessive usage fees from small-scale self-employed owners under the pretext that “the extent and nature of music use were the same.” It is estimated that the cumulative damage suffered by these small business owners amounts to approximately 70 million won. Affected owners complained, saying, “We were forced to pay rates meant for entertainment venues even though we are regular restaurants,” and added, “We protested to the Korea Music Copyright Association, but it was difficult to reject their demands due to its monopolistic position.” The Together Music Copyright Association labeled this behavior as “an outright unjust fraudulent act” and filed criminal charges against the Korea Music Copyright Association on September 25. An even more serious issue involves corruption allegations against two senior executives of the Korea Music Copyright Association. Earlier this year, the association detected signs that some companies had falsely reported playlists, artificially inflating playback counts to force payments to incorrect entities. The key suspects established an AI music sales corporation and reaped 800 million won in profits, most of which came from supplying AI music to the companies involved in the false reporting. The corporation was registered under the name of one of the executives’ acquaintances, and its office is currently locked shut. The association has removed the two executives from their positions and placed them on standby, while also conducting a special audit to investigate the possibility that they received money in exchange for turning a blind eye to the false reports. The police have also begun preliminary investigations before formal charges are filed. The Korea Music Copyright Association is responsible for distributing copyright fees—amounting to roughly 400 billion won annually—to creators based on playlists collected from music streaming service providers. This incident has raised doubts about its transparency and management system. Kim Jae-won, a member of the National Assembly’s Culture, Sports and Tourism Committee from the Joonguk Innovation Party, stated, “This is not just an individual lapse; there are concerns that creators may not have received proper compensation.” The Korea Music Copyright Association responded by saying it would use this incident as a painful lesson to become a more transparent and accountable organization. It explained that it plans to cooperate fully with the Ministry of Culture, Sports and Tourism’s inspections, parliamentary hearings, and police investigations. The association also stated it intends to take strict legal action if necessary based on the investigation results. The executives involved have defended themselves by claiming that some of the allegations against them are untrue.