South Korea’s Fair Trade Commission (FTC) has imposed fines on K-pop titans HYBE, YG, SM, and JYP Entertainment, citing violations of fair trade regulations due to their restrictive retail policies.
According to Korean media, on August 11, the FTC announced corrective orders and fines amounting to KRW 10.5 million (approximately Php 440,308.47) against the retail branches of these industry leaders: Weverse Company, YG Plus, SM Brand Marketing, and JYP Three Sixty.
These sanctions are linked to practices at the companies’ official online retail platforms. The FTC found that these firms had “arbitrarily shortened the period where customers are able to get refunds on idol-related merchandise,” including albums, which was a direct breach of consumer protection laws.
One significant infraction was identified at SM Brand Marketing, which required customers seeking refunds for a change of mind to ensure the product arrived at its logistics center within seven business days of delivery. This policy contravened the legal stipulation that customers have the right to decide on returns within seven days of receipt. Additional violations involved policies at Weverse, SM, and JYP — where compensation for lost items was denied if claims were made after 30 days from shipping. The law, however, permits customers to make monetary claims within three months of purchase.
Following the FTC’s investigation, all four companies quickly implemented voluntary policy corrections. This proactive approach led to a reduction in their fines, resulting in the Weverse Company being fined KRW 3 million — the highest among the four — while SM, YG, and JYP each received fines of KRW 2.5 million.