Korean entertainment company ordered to revise “unfair” contracts
One of South Korea’s biggest entertainment companies, SM Entertainment, was ordered on Thursday by the country’s Fair Trade Commission (FTC) to revise the “unfair” contracts that bind their artistes, reported Korean media.
“We issued SM Entertainment a warning to voluntarily correct the unfair exclusive contracts that their artists, as well as trainees, are bound to.”
There were also harsh penalties for artistes who breach the contract – they would have to pay three times the amount SM Entertainment invested in them and double the amount they would have made in the remaining years of the contract.
SM Entertainment has since modified their contracts to “seven years from the day of debut” while the breach-of-contract penalties have been greatly reduced, with defaulters having to pay SM Entertainment a sum equal to their average monthly sales (over a period of two years) multiplied by the months remaining on their contract.