South Korea\u2018s Fair Trade Commission has opened an investigation into HYBE and its subsidiary ADOR over the companies\u2019 treatment of NewJeans member Danielle.<\/p>\n
That\u2019s according to Danielle\u2018s attorney, Jung Jong-chae, who filed the complaint that prompted the review and said the regulator \u2014 known as the KFTC \u2014 began investigating on June 4.<\/p>\n
The complaint reaches beyond a single artist\u2019s case, asking the KFTC to examine a penalty mechanism written into the exclusive contracts used across the K-pop industry.<\/p>\n
At the center of the filing is the claim that ADOR singled Danielle out from the rest of NewJeans.<\/p>\n
According to the complaint, all five members served notices to end their ADOR contracts, yet the label terminated only Danielle\u2018s deal and is now pursuing penalties and damages against her.<\/p>\n
In a blog post<\/a> on June 21, Jung argued that the suit is designed not to recover money but to remove Danielle from the market permanently and to deter other artists from challenging their agencies.<\/p>\n He says the dispute \u201cgoes beyond a mere matter of contract interpretation,\u201d casting it as a question for competition law rather than the civil courts.<\/p>\n According to the complaint, ADOR has filed a partial claim of around 33 billion won (about $21 million) against Danielle, while the total penalty the label could seek under the contract runs beyond 100 billion won ($65 million).<\/p>\n Jung contends that the figure bears little relation to any loss ADOR actually suffered, and that the reason lies in how the penalty is built.<\/p>\n Under the standard exclusive contract issued by South Korea\u2018s Ministry of Culture, Sports and Tourism, a departing artist owes revenue multiplied by the remaining contract term, rather than the agency\u2019s lost profit.<\/p>\n Jung estimates that for a group as successful as NewJeans, the agency\u2019s actual loss is between a quarter and a tenth of revenue, and describes the revenue-based formula as a clause that imposes what he calls \u201cinfinite liability\u201d on artists.<\/p>\n Because that clause sits in the government\u2019s template, the complaint notes, it is used by almost every agency \u2013 not only HYBE.<\/p>\n Jung also argues that the regulator\u2019s decision to investigate is itself significant.<\/p>\n He says that since the KFTC introduced standard entertainment contracts in 2009, following the dispute involving boy band TVXQ, it has not previously opened a case over an agency using contract termination and penalty claims to push an artist out of the market.<\/p>\n The filing also seeks to define HYBE as a dominant operator, arguing that its labels \u2013 including ADOR, Source Music and BELIFT LAB \u2013 together control close to 50% of the K-pop market under a single decision-making structure, Jung said.<\/p>\n It frames the large agencies as platforms with monopsony power, dominant buyers of artists\u2019 labor that can hold performers in place even when they want to leave.<\/p>\n In competition terms, the complaint argues that penalties an artist cannot pay block transfers between agencies and deter smaller rivals from signing talent, an effect it calls market foreclosure.<\/p>\n For readers who have not followed the dispute, the case is the latest turn in a saga that has run through South Korea\u2018s music industry for more than a year and a half.<\/p>\n It began with the removal of Min Hee-jin, the ADOR founder credited with creating NewJeans, whom HYBE ousted as CEO in 2024 after accusing her of trying to seize control of the label.<\/p>\n In November 2024, NewJeans declared they were terminating their contracts with ADOR, citing a breakdown of trust; the label said the deals remained in effect.<\/p>\n ADOR sued the following month to confirm the contracts, and in October 2025 the Seoul Central District Court ruled the agreements valid<\/a>, finding that Min\u2018s dismissal did not breach them.<\/p>\n The five members initially signaled a collective return to ADOR, but their paths have since diverged.<\/p>\n Haerin, Hyein and Hanni have confirmed they will resume activities with ADOR, while talks with Minji over her return are ongoing.<\/p>\n ADOR, meanwhile, terminated Danielle\u2019s contract in December 2025<\/a> and has since filed legal action against her.<\/p>\n The complaint lands as HYBE faces other friction with South Korea\u2018s regulators.<\/p>\n In June 2025, the KFTC finalized a consent resolution with HYBE, SM Entertainment, YG Entertainment, JYP Entertainment and Starship Entertainment<\/a> over violations of the country\u2019s Subcontracting Transaction Fairness Act.<\/p>\n That case concerned the agencies\u2019 dealings with outside suppliers rather than their artists, but it marked recent friction between the KFTC and the major K-pop companies.<\/p>\n Separately, HYBE founder and chairman Bang Si-hyuk<\/a> is the subject of a securities-fraud investigation tied to the company\u2019s stock-market listing.<\/p>\n Bang is accused of misleading investors in 2019 by telling them HYBE \u2014 then Big Hit Entertainment \u2014 had no plans to go public, before the company proceeded with its 2020 IPO.<\/p>\n