South Korea’s Fair Trade Commission has instigated a formal review into K-pop powerhouse HYBE and its Ador agency following a complaint filed by Danielle Marsh, the former member of NewJeans who was sacked from the group and then sued by Ador.
Marsh’s core grievance is that she has been treated differently to the other members of NewJeans, despite all five members initially announcing they were quitting Ador in support of its founder and CEO Min Hee-jin, who was pushed out of the business in 2024 after a dispute with HYBE management.
However, the complaint also raises more general issues with HYBE’s conduct and standard talent agreements employed by the K-pop industry, calling for the regulator to scrutinise whether common industry practices fairly balance the interests of artists and the agencies or labels they work with. Which means this review could impact on the wider K-pop industry, not just NewJeans and not just HYBE.
The KFTC announced it was opening a formal review of Marsh’s complaint earlier this month. In a blog post, her attorney Jung Jong-chae is keen to stress that the fact a review is underway is pretty significant, “given the high frequency of decisions not to proceed with a review”.
He successfully “prompted the FTC to initiate a review”, he writes, by “pointing out the flaws” in industry standard K-pop agreements and “emphasising that they no longer function effectively as a standard in the real world, as they fail to align with the K-pop market, which has undergone rapid change, globalisation and massive expansion”.
When NewJeans announced they were quitting Ador in protest over Min’s sacking in 2024, HYBE insisted the group couldn’t unilaterally cancel their contract with the agency. After Ador sought to enforce that contract through the courts, the group ultimately agreed to continue working with the company on new projects.
But then Ador announced Marsh would no longer be part of the group and added her as a co-defendant on a lawsuit it filed against Min. That’s based on allegations that family members of Marsh colluded with Min in a bid to move the group to a new agency outside of the HYBE empire. That legal battle between Ador, Min and Marsh is ongoing.
Marsh’s lawyers argue that all five members of the group were involved in the same contract dispute with Ador, yet only she has been targeted with dismissal and litigation. By only targeting one member of the group, NewJeans can continue, but a firm message has been sent by HYBE to the K-pop artist community.
According to Asian Entertainment & Culture, Marsh’s complaint reckons that Ador’s conduct “sends a clear warning to the remaining NewJeans members and other artists under HYBE’s management that challenging the company carries severe financial and career consequences”.
It then criticises the ‘penalty provision’ in K-pop artist deals which allows agencies to seek compensation when contracts end early. This allows compensation claims to be based on an artist’s expected revenues rather than actual losses, and also isn’t clear about how to deal with disputes involving a single member of a group, when the rest of the group can continue to generate income.
The KFTC review adds yet another dimension to the ongoing and multi-layered fallout of Min’s sacking from Ador. The corporate side of the wider K-pop industry has already expressed concern this dispute could impact on other agencies operating in the sector - and, depending on where the KFTC takes its investigation, this review could be the part of the dispute that has the biggest impact in that domain.