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On October 8, 2024, YG Entertainment, SM Entertainment, HYBE, and JYP Entertainment executives were summoned to the National Assembly's Culture, Sports, and Tourism Committee’s state audit. SM CEO Jang Chul-hyuk, YG CEO Yang Min-seok, JYP CEO Jung Wook, and HYBE subsidiary Weverse's CEO Choi Jun-won appeared for the questioning.
The audit focused on the protection of choreography copyrights and album sales manipulation, which have been rampant in the K-pop industry. Representatives from YG Entertainment, SM Entertainment, HYBE's Weverse, and JYP Entertainment attended the questioning and agreed to follow the choreography copyright system.
This discussion arose after former ADOR CEO Min Hee-jin accused HYBE subsidiary label, Belift Lab's rookie girl group, ILLIT, of plagiarising NewJeans' choreography. She also accused HYBE of "sajaegi"—album sales inflation—which brought forward the album bulk-buying issue throughout the industry.
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SM Entertainment’s CEO, Jang Cheol-hyun, highlighted that albums are sold via "agreements" with distribution companies. He told the National Assembly audit committee,
"We sell albums through agreements with distribution companies, and I will return to the company to verify if there are any concerns as mentioned by the lawmaker," he said.
HYBE subsidiary company Weverse's CEO Choi Jun-won (a HYBE representative) addressed selling "Weverse versions" of albums, minimizing the sale of physical copies. He stated that this method curbs the chances of "sajaegi" and is more environmentally beneficial.
"Our platform is making efforts to address this by offering ‘Weverse Albums,’ where music can be downloaded via QR codes without the need for physical CDs. Other agencies are also working in this direction to have a positive environmental impact."
Similarly, JYP CEO Jung Wook told the National Assembly audit committee that at fansign events, K-pop album sales are overseen by retailers and not the entertainment companies. All agency representatives present at the audit asserted to verify details of their respective companies to ensure there are no cases of "sajaegi."
National Assembly audit highlights choreography plagiarism dispute involving NewJeans & ILLIT, proposes copyright protection plan
During the National Assembly's Culture, Sports, and Tourism Committee’s state audit, Shin Dong-wook of the People Power Party (PPP) raised the issue of Belift Lab's ILLIT's choreography being "similar" to NewJeans. The latter is a rookie girl group from ADOR— another HYBE subsidiary label. Meanwhile, Shin Dong-wook said,
"This is a recent choreography that has become quite controversial. If you look closely, the choreography is very similar to another one. Especially for those involved, this choreography has emerged as a key content in the current cultural landscape. There are many people raising concerns about choreography copyright. Are you reviewing that aspect?"
The Director of Copyright Bureau, Jeong Hyang-mi responded that they have been assessing the choreography copyright reports and aim to publish set guidelines by the end of 2024. Jeong Hyang-mi said at the National Assembly audit that,
"We have gathered opinions from relevant parties regarding choreography copyright and are currently conducting research on the matter.(...) The research will conclude, and based on that, we plan to create a comprehensive guideline by the end of the year."
Sports Kyunghyang reported that Democratic Party of Korea lawmaker, Min Hyung-bae, questioned YG CEO Yang Min-seok about K-pop groups' choreography and the revenue they earned during the National Assembly audit.
He asked CEO Yang Min-seok about how much each of BLACKPINK's YouTube choreography videos generate. Yang Min-seok replied that each video continues to generate several 100 million won for the company.
National Assembly Minister Yoo In-chon and Shin Dong-wook of the People Power Party asserted how they have paid close attention to HYBE's ongoing public feud with Min Hee-jin since April 2024. The feud exposed alleged album bulk-buying in the industry and plagiarism allegations. They urged the Copyrights Bureau to release strict guidelines to protect artists from plagiarism at the earliest.
Meanwhile, during the Fair Trade Commission’s investigation earlier this year, the Democratic Party lawmaker Kang Yoo-jung underscored how each of the four major K-pop companies— YG Entertainment, SM Entertainment, HYBE, and JYP Entertainment— were investigated and fined for unfair refund policies. The National Assembly also highlighted the case during its audit.
In August 2024, The Chosun Daily reported that the Fair Trade Commission (FTC) found that four companies reduced the time frame for fans to receive refunds for idol-related items and merch. The law stipulates that consumers have seven days from the date of delivery to determine whether to return goods.
SM's policy refused to refund consumers based on a "simple change of mind." The law also allows for financial claims within three months of purchase. Weverse, SM, and JYP all have policies that prohibit them from providing reimbursement for lost products beyond 30 days from the date of shipment.
As a result, the Fair Trade Commission fined Weverse KRW 3 million ($2,236.09), while KRW 2.5 million ($1,863.41) each was imposed on SM, YG, and JYP.
All four entertainment company representatives vowed to follow the new guidelines, once released, to protect artists and copyright issues.
