Major K-pop agencies investigated for unfairness of excessive tie-in merch

A photo book version of K-pop band NCT's third album “ISTJ,” which is on sale at SM Town & Store / Screenshot from SM Town & Store

By Kim Jae-heun

The nation's antitrust agency has launched investigations into the alleged unfair trade practices of local entertainment companies as consumers complain about gimmick tie-in sales of K-pop groups' new albums and photo cards, according to industry officials, Friday.

HYBE, SM, YG, JYP and other agencies are known to sell new K-pop albums with random photo cards of the band members. This means that fans often have to buy more than one album to get the card they want.

SM Entertainment introduced a total of 50 collectible photo cards of K-pop boy band NCT recently. These cards contain photos of the individual band members, sometimes genuinely autographed. The prices of these rare photo cards can soar on online resale platforms.

“Usually, one album costs about 15,000 won ($11.46) to a maximum of 30,000 won. I've spent more than 100,000 won to get the card I want before,” a 28-year-old K-pop fan surnamed Kim said. “These cards are very rare and I can only get them by purchasing more albums until I get the one I was looking for.”

The marketing strategy could violate the Fair Trade Act if different products are unfairly sold in combinations to consumers. The Fair Trade Commission (FTC) is investigating whether the entertainment companies have committed an unlawful act or not. It said “the agency cannot comment on the details of its ongoing probe.”

The FTC visited three entertainment companies: SM Entertainment on July 31, JYP Entertainment on Tuesday and YG Entertainment on Wednesday. All three firms were not available for contract.

“We cannot comment on the issue,” a HYBE official said. HYBE is home to K-pop powerhouse acts such as BTS, NewJeans, Seventeen and Le Sserafim.

The FTC has also launched a probe to look into the firms' alleged unfair practices related to tie-in sales of K-pop bands' marketing goods.

They are accused of pushing around the subcontractors producing their marketing items and supplying them at lower market prices.