South Korea‘s Honest Commerce Fee has opened an investigation into HYBE and its subsidiary ADOR over the businesses’ remedy of NewJeans member Danielle.
That’s in response to Danielle‘s legal professional, Jung Jong-chae, who filed the grievance that prompted the overview and mentioned the regulator — often known as the KFTC — started investigating on June 4.
The grievance reaches past a single artist’s case, asking the KFTC to look at a penalty mechanism written into the unique contracts used throughout the Ok-pop business.
On the middle of the submitting is the declare that ADOR singled Danielle out from the remainder of NewJeans.
In line with the grievance, all 5 members served notices to finish their ADOR contracts, but the label terminated solely Danielle‘s deal and is now pursuing penalties and damages in opposition to her.
In a weblog submit on June 21, Jung argued that the go well with is designed to not recuperate cash however to take away Danielle from the market completely and to discourage different artists from difficult their businesses.
He says the dispute “goes past a mere matter of contract interpretation,” casting it as a query for competitors regulation quite than the civil courts.
In line with the grievance, ADOR has filed a partial declare of round 33 billion gained (about $21 million) in opposition to Danielle, whereas the full penalty the label might search below the contract runs past 100 billion gained ($65 million).
Jung contends that the determine bears little relation to any loss ADOR really suffered, and that the rationale lies in how the penalty is constructed.
Below the usual unique contract issued by South Korea‘s Ministry of Tradition, Sports activities and Tourism, a departing artist owes income multiplied by the remaining contract time period, quite than the company’s misplaced revenue.
Jung estimates that for a gaggle as profitable as NewJeans, the company’s precise loss is between 1 / 4 and a tenth of income, and describes the revenue-based method as a clause that imposes what he calls “infinite legal responsibility” on artists.
As a result of that clause sits within the authorities’s template, the grievance notes, it’s utilized by nearly each company – not solely HYBE.
Jung additionally argues that the regulator’s choice to analyze is itself vital.
He says that because the KFTC launched commonplace leisure contracts in 2009, following the dispute involving boy band TVXQ, it has not beforehand opened a case over an company utilizing contract termination and penalty claims to push an artist out of the market.
The submitting additionally seeks to outline HYBE as a dominant operator, arguing that its labels – together with ADOR, Supply Music and BELIFT LAB – collectively management near 50% of the Ok-pop market below a single decision-making construction, Jung mentioned.
It frames the big businesses as platforms with monopsony energy, dominant patrons of artists’ labor that may maintain performers in place even once they need to go away.
In competitors phrases, the grievance argues that penalties an artist can’t pay block transfers between businesses and deter smaller rivals from signing expertise, an impact it calls market foreclosures.
For readers who haven’t adopted the dispute, the case is the most recent flip in a saga that has run by South Korea‘s music business for greater than a 12 months and a half.
It started with the elimination of Min Hee-jin, the ADOR founder credited with creating NewJeans, whom HYBE ousted as CEO in 2024 after accusing her of attempting to grab management of the label.
In November 2024, NewJeans declared they have been terminating their contracts with ADOR, citing a breakdown of belief; the label mentioned the offers remained in impact.
ADOR sued the next month to substantiate the contracts, and in October 2025 the Seoul Central District Court docket dominated the agreements legitimate, discovering that Min‘s dismissal didn’t breach them.
The 5 members initially signaled a collective return to ADOR, however their paths have since diverged.
Haerin, Hyein and Hanni have confirmed they are going to resume actions with ADOR, whereas talks with Minji over her return are ongoing.
ADOR, in the meantime, terminated Danielle’s contract in December 2025 and has since filed authorized motion in opposition to her.
The grievance lands as HYBE faces different friction with South Korea‘s regulators.
In June 2025, the KFTC finalized a consent decision with HYBE, SM Leisure, YG Leisure, JYP Leisure and Starship Leisure over violations of the nation’s Subcontracting Transaction Equity Act.
That case involved the businesses’ dealings with exterior suppliers quite than their artists, but it surely marked current friction between the KFTC and the foremost Ok-pop firms.
Individually, HYBE founder and chairman Bang Si-hyuk is the topic of a securities-fraud investigation tied to the corporate’s stock-market itemizing.
Bang is accused of deceptive traders in 2019 by telling them HYBE — then Massive Hit Leisure — had no plans to go public, earlier than the corporate proceeded with its 2020 IPO.
Seoul police have twice sought an arrest warrant for Bang, and prosecutors have rejected each requests; Bang has denied wrongdoing.
The opening of a KFTC overview is a preliminary step and carries no discovering that HYBE or ADOR broke the regulation.
MBW has reached out to HYBE for remark.
ADOR has persistently maintained that its contract with NewJeans is legitimate, telling MBW after the October ruling that the court docket had affirmed the deal “stays legitimate.”
The civil case over the penalties ADOR is searching for from Danielle stays earlier than the courts.Music Enterprise Worldwide
