FTC orders S.M. to correct wrongdoings against JYJ

The dispute between S.M. Entertainment and K-pop idol group JYJ has come to an end as Korea’s antitrust agency ordered S.M. Entertainment to correct and undo its wrongdoings against the three-member boy band.

The Fair Trade Commission said Wednesday that it sanctioned S.M., one of the top three talent agencies in Korea, for its attempts to block JYJ from appearing on music television shows and distributing their albums over the years.

S.M., in collusion with the Union of Korean Pop Culture and Arts Industry, a collective federation of artists promoting Korean culture and arts at home and abroad, has abused its power as a dominant entertainment agency by relentlessly hindering JYJ’s expansion since the boy group broke off its relationship with S.M. in 2009, according to the FTC.

S.M., which counts artists such as Girls’ Generation and Super Junior on its books, made a net profit of 37.1 billion won ($33 million) in 2012. It holds a share of more than 30 percent in the music album market, and is one of the key members of the UKPCA, the FTC noted.

The conflict between S.M. and JYJ began three years ago when the three idol members, who were part of S.M.’s five-member boy band Dong Bang Shin Ki formed in 2003, accused their former agency of carrying out an unfair contract. 

Three members of DBSK then officially broke away from S.M. and formed their own group called JYJ with C-Jes Entertainment.

But the two sides continued to battle, filing injunctions against one another. JYJ asked the court to suspend and annul its former contract with S.M., while S.M. tried to stop distribution of JYJ’s first album via Warner Music through a court order.

The UKPCA also sent official letters to 26 TV stations and music wholesalers asking them not to promote JYJ, making it harder for the group to appear on music and variety shows.

C-Jes welcomed the FTC’s decision, saying that it hopes from now on that JYJ as well as future artists can “fairly” perform and appear before the public without the influence of big market players.

By Park Hyong-ki (hkp@heraldcorp.com)