Big Planet Made Entertainment, a music agency, and Kakao Entertainment, the company behind Korea’s biggest music platform Melon, are currently embroiled in a dispute over music distribution fees.
On March 4, Big Planet Made Entertainment stated, “After recently finding out that Kakao Entertainment was charging distribution fees discriminatorily between agencies belonging to its affiliates and subsidiaries and other agencies, we requested the Fair Trade Commission (FTC) to review this issue in January.”
According to Big Planet Made Entertainment, they have gathered evidence that shows Kakao Entertainment demanding a distribution fee of approximately 20% from general companies while charging only 5-6% to affiliates like SM Entertainment.
They find this significant difference in distribution fees hard to comprehend and believe it may lead to maximizing profits for affiliated companies.
The agency claims that Kakao Entertainment, with its dominant market position, may have violated the Fair Trade Act by imposing discriminatory distribution fees. The act prohibits unfair pricing practices and aims to prevent abuse of market dominance.
Big Planet Made Entertainment stated that they asked Kakao Entertainment to end their distribution contract, but Kakao Entertainment refused. They also mentioned that around the same time, they approved a change to the distribution contract with another music agency, Company A.
In response, the agency has submitted supporting evidence to the Fair Trade Commission and is considering sharing the data if necessary.
On the other hand, Kakao Entertainment responded by saying that Big Planet Made’s claim is one-sided and announced their intention to provide a rebuttal.