South Korea’s Fair Trade Commission opens investigation into HYBE and ADOR over NewJeans’ Danielle — and the complaint targets a penalty clause used across K-pop
South Korea‘s Fair Trade Commission has opened an investigation into HYBE and its subsidiary ADOR over the companies’ treatment of NewJeans member Danielle.
That’s according to Danielle‘s attorney, Jung Jong-chae, who filed the complaint that prompted the review and said the regulator — known as the KFTC — began investigating on June 4.
The complaint reaches beyond a single artist’s case, asking the KFTC to examine a penalty mechanism written into the exclusive contracts used across the K-pop industry.
At the center of the filing is the claim that ADOR singled Danielle out from the rest of NewJeans.
According to the complaint, all five members served notices to end their ADOR contracts, yet the label terminated only Danielle‘s deal and is now pursuing penalties and damages against her.
In a blog post on June 21, Jung argued that the suit is designed not to recover money but to remove Danielle from the market permanently and to deter other artists from challenging their agencies.
He says the dispute “goes beyond a mere matter of contract interpretation,” casting it as a question for competition law rather than the civil courts.
According to the complaint, ADOR has filed a partial claim of around 33 billion won (about $21 million) against Danielle, while the total penalty the label could seek under the contract runs beyond 100 billion won ($65 million).
Jung contends that the figure bears little relation to any loss ADOR actually suffered, and that the reason lies in how the penalty is built.
Under the standard exclusive contract issued by South Korea‘s Ministry of Culture, Sports and Tourism, a departing artist owes revenue multiplied by the remaining contract term, rather than the agency’s lost profit.
Jung estimates that for a group as successful as NewJeans, the agency’s actual loss is between a quarter and a tenth of revenue, and describes the revenue-based formula as a clause that imposes what he calls “infinite liability” on artists.
Because that clause sits in the government’s template, the complaint notes, it is used by almost every agency – not only HYBE.
Jung also argues that the regulator’s decision to investigate is itself significant.
He says that since the KFTC introduced standard entertainment contracts in 2009, following the dispute involving boy band TVXQ, it has not previously opened a case over an agency using contract termination and penalty claims to push an artist out of the market.
The filing also seeks to define HYBE as a dominant operator, arguing that its labels – including ADOR, Source Music and BELIFT LAB – together control close to 50% of the K-pop market under a single decision-making structure, Jung said.
It frames the large agencies as platforms with monopsony power, dominant buyers of artists’ labor that can hold performers in place even when they want to leave.
In competition terms, the complaint argues that penalties an artist cannot pay block transfers between agencies and deter smaller rivals from signing talent, an effect it calls market foreclosure.
For readers who have not followed the dispute, the case is the latest turn in a saga that has run through South Korea‘s music industry for more than a year and a half.
It began with the removal of Min Hee-jin, the ADOR founder credited with creating NewJeans, whom HYBE ousted as CEO in 2024 after accusing her of trying to seize control of the label.
In November 2024, NewJeans declared they were terminating their contracts with ADOR, citing a breakdown of trust; the label said the deals remained in effect.
ADOR sued the following month to confirm the contracts, and in October 2025 the Seoul Central District Court ruled the agreements valid, finding that Min‘s dismissal did not breach them.
The five members initially signaled a collective return to ADOR, but their paths have since diverged.
Haerin, Hyein and Hanni have confirmed they will resume activities with ADOR, while talks with Minji over her return are ongoing.
ADOR, meanwhile, terminated Danielle’s contract in December 2025 and has since filed legal action against her.
The complaint lands as HYBE faces other friction with South Korea‘s regulators.
In June 2025, the KFTC finalized a consent resolution with HYBE, SM Entertainment, YG Entertainment, JYP Entertainment and Starship Entertainment over violations of the country’s Subcontracting Transaction Fairness Act.
That case concerned the agencies’ dealings with outside suppliers rather than their artists, but it marked recent friction between the KFTC and the major K-pop companies.
Separately, HYBE founder and chairman Bang Si-hyuk is the subject of a securities-fraud investigation tied to the company’s stock-market listing.
Bang is accused of misleading investors in 2019 by telling them HYBE — then Big Hit Entertainment — had no plans to go public, before the company proceeded with its 2020 IPO.
Seoul police have twice sought an arrest warrant for Bang, and prosecutors have rejected both requests; Bang has denied wrongdoing.
The opening of a KFTC review is a preliminary step and carries no finding that HYBE or ADOR broke the law.
MBW has reached out to HYBE for comment.
ADOR has consistently maintained that its contract with NewJeans is valid, telling MBW after the October ruling that the court had affirmed the deal “remains valid.”
The civil case over the penalties ADOR is seeking from Danielle remains before the courts.Music Business Worldwide
