Baekhyun, Xiumin, And Chen File Complaint To Fair Trade Commission Against SM + SM Releases New Statement With Decision

Baekhyun, Xiumin, and Chen’s legal representative and SM Entertainment have shared updates on their legal battle.

On June 5, EXO’s Baekhyun, Xiumin, and Chen’s legal representative of the law firm LIN announced that they filed a complaint to the Fair Trade Commission on June 4 against SM Entertainment for “abuse of superior bargaining position.”

The main points of the complaint are as follows:

1. Despite the Fair Trade Commission’s resolution of banning SM’s [unfair contracts] twice in 2007 and 2011, SM did not rectify [the contracts].

2. Calculating the exclusive contract period from the “entertainment industry debut date” (instead of from the date the exclusive contract was signed) leads to an excessively long contract period, the period which is determined by the agency’s discretion, and has already been confirmed to be unjust, but SM is still not following the Fair Trade Commission’s corrective measures.

3. Through the Fair Trade Commission’s 2007 resolution, SM already received the judgment that the contract period of “5 years from the debut date (instead of the contract signing date)” is excessively long-term, but SM actually signed even more unjust contracts by deciding periods of of seven years in the exclusive contract and three years in the annex agreement.

4. SM is violating the Fair Trade Commission’s correction order by continuing to use the expedient of an indiscriminately extended contract period for reasons such as overseas activities that are not even confirmed at the time of the contract signing.

5. Subsequent exclusive contracts that are automatically extended until the album release numbers are fulfilled are extremely unfair as a minimum time period has not been set.

6. We filed a complaint with the Fair Trade Commission with the hope that our small courage will be of help for the establishment of a fair popular culture [industry] and for the sake of junior artists.

SM Entertainment also released a new statement sharing their decision on the matter.

The statement reads as follows:

Hello, this is SM Entertainment.
Regarding the recent request to provide copies of settlement reports from Byun Baek Hyun, Kim Jong Dae, and Kim Min Seok (hereafter referred to as the “three artists”), we would like to inform you of the decision we made after careful consideration.

1. Settlement reports are confidential information that cannot be disclosed to third parties.

– In the case of a group, special attention is required as they contain information about other members as well.

Settlement reports may include various information such as each artist’s specific activity details, settlement rate and method, down payment, etc. This is confidential information of our agency that should not be exposed to third parties such as competitors. In addition, in the case of a group composed of several members, [provision of settlement reports] is only possible when there is trust in non-disclosure as information of other members may be exposed.

In the first place, our agency has been steadily providing our artists with opportunities to view settlement details. In fact, there have been artists who have questions or opinions about their settlement details or have asked for additional explanations, and we have fully explained each time.

2. Claims of the three artists’ legal representative.

– They remain silent on our requests for a confidentiality agreement such as whether there is no involvement of any third party and only repeat their request for copies [of settlement reports].

– They made it official that there is no third party involvement only to the media and not to us.

Under the circumstances where third party involvement is being reported [to us] through various channels, our company is concerned that there is another negative intention of the three artists’ legal representative and their requests to be provided copies while mentioning the termination of contracts although they have the opportunity to visit us at any time to review the settlement reports and present their opinions.

Due to these concerns, when we received the request to provide copies from the three artists, we repeatedly asked [the representative of the three artists] for confirmation on aspects such as “whether the three artists have signed a dual contract with a third party that may breach our exclusive contract” and “whether they represent the three artists only.” It is also true that the representative of the three artists has consistently remained silent to our questions.

Recently, the representative of the three artists has made it clear to the press, and not to our agency, that there is no third party involvement in the actions of the three artists or that the request to provide copies of settlement reports is only a legitimate right of the three artists. Internally, many are voicing concerns about whether the representative of the three artists can be trusted and whether there is no third party involvement despite numerous [disproving] tip-offs and circumstances.

3. The agency’s decision for EXO.

– We have decided to provide copies of the settlement reports with the consent and understanding of EXO members on the premise that the three artists and legal representative do not use them for unjust purposes.

– We will do our best to not interfere with EXO’s activities.

After deliberation, on the premise that we receive confirmation that the three artists and their legal representative will not use [the reports] for any other unjust purposes than to check the settlement details, the agency has decided to provide copies of the settlement reports to the three artists. Furthermore, we have explained this situation to the EXO members besides the three artists, and we asked for their consent and understanding regarding the provision of copies of settlement reports.

Through these measures, the agency hopes that we can convey our sincere feelings of loving and cherishing all the EXO members as well as the fans who treasure EXO.

Regarding the question raised by the three artists, various reports are rising regarding the agency, but we are not refuting them in detail one by one. However, we want to make clear that contracts are not terminated through unilateral notification with insufficient evidence. In addition, apart from holding those who are giving wrong advice to the third party or the three artists legally and morally accountable, we will continue to do our best to come to a mutual agreement with the three artists we cherish. We will do our best not to impede on EXO’s activities which fans are anticipating.

Thank you.

It was first announced on June 1 that EXO’s Baekhyun, Xiumin, and Chen notified SM Entertainment regarding the termination of their exclusive contracts, which SM responded to with a detailed statement. Baekhyun, Xiumin, and Chen’s legal representative released an additional statement on June 2 with a rebuttal of SM’s claims.

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