South Korea‘s Truthful Commerce Fee has opened an investigation into HYBE and its subsidiary ADOR over the businesses’ remedy of NewJeans member Danielle.
That’s in keeping with Danielle‘s legal professional, Jung Jong-chae, who filed the criticism that prompted the evaluate and mentioned the regulator — often known as the KFTC — started investigating on June 4.
The criticism 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 trade.
On the heart of the submitting is the declare that ADOR singled Danielle out from the remainder of NewJeans.
In response to the criticism, 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 towards her.
In a weblog publish on June 21, Jung argued that the swimsuit is designed to not recuperate cash however to take away Danielle from the market completely and to discourage different artists from difficult their companies.
He says the dispute “goes past a mere matter of contract interpretation,” casting it as a query for competitors legislation reasonably than the civil courts.
In response to the criticism, ADOR has filed a partial declare of round 33 billion received (about $21 million) towards Danielle, whereas the full penalty the label might search below the contract runs past 100 billion received ($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.
Underneath 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, reasonably 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 criticism notes, it’s utilized by nearly each company – not solely HYBE.
Jung additionally argues that the regulator’s determination to analyze is itself important.
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 massive companies as platforms with monopsony energy, dominant consumers of artists’ labor that may maintain performers in place even after they need to go away.
In competitors phrases, the criticism argues that penalties an artist can’t pay block transfers between companies 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 means of South Korea‘s music trade 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 making an attempt to grab management of the label.
In November 2024, NewJeans declared they had 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 Courtroom 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 towards her.
The criticism 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 companies’ dealings with outdoors suppliers reasonably than their artists, however it marked current friction between the KFTC and the main Ok-pop corporations.
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 Huge 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 evaluate is a preliminary step and carries no discovering that HYBE or ADOR broke the legislation.
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 looking for from Danielle stays earlier than the courts.Music Enterprise Worldwide
