K-pop agencies on Monday denied or sidestepped responsibility for major issues in the industry during a National Assembly audit in Yeouido, Seoul.

YG Entertainment CEO Yang Min-suk, SM Entertainment CEO Jang Cheol-hyuk and JYP Entertainment CEO Jimmy Jeong appeared to answer lawmakers’ questions about chart manipulation, album bundling with photo cards, fair trade law violations and choreography copyright issues. Hybe was represented by Joon Choi, CEO of its subsidiary Weverse Co.

Rep. Lim O-kyeong of the main opposition Democratic Party of Korea raised the issue of chart manipulation through bulk purchases of physical albums. This practice involves entertainment companies purchasing large quantities of their own artists’ albums to artificially inflate sales figures, especially in the crucial first week of release. These albums may later be resold to fans, skewing chart rankings.

“As far as I know, album distribution is handled through an agreement between the company and the distributor. I will check with the company to see if such practices exist,” SM Entertainment CEO Jang responded.

Culture Minister Yu In-chon acknowledged the difficulty of monitoring every instance of chart manipulation, but emphasized legal accountability if such cases are confirmed.

Lim also criticized K-pop agencies for bundling albums with collectible photo cards, a tactic that pressures fans to buy multiple copies to collect each version. Critics argue this practice leads to excessive spending and unnecessary waste.

“Over 100 types of photo cards are being released with a single album, and there are platforms where fans trade these cards, often at inflated prices. While the album itself may cost around 20,000 won ($15), some rare photo cards included can be resold for as much as 100,000 won each,” Lim said.

Weverse CEO Choi distanced his company from the issue, saying that Weverse only facilitates interactions between labels and fans and does not control marketing strategies.

When asked about fans spending exorbitant amounts of money to attend signing events, with some reportedly going into debt, JYP Entertainment CEO Jeong similarly shifted responsibility.

“Fan signing events are organized and managed by retailers. If there are any concerns, I will look into the matter,” Jeong said.

The culture minister noted that the Korea Creative Content Agency operates a reporting center to handle complaints about such marketing tactics. If necessary, cases may be referred for investigation.

Rep. Kang Yu-jung, also of the Democratic Party, raised concerns about fair trade violations by Weverse. The Fair Trade Commission found that Weverse and three other companies had shortened the legally mandated refund period for faulty products, offering only a seven-day window instead of the required 30 days.

“According to Hybe's business report, the company generated 325 billion won from idol merchandise sales alone last year, amounting to a total of 1.2 trillion won between 2021 and 2024. However, Weverse Co. only paid a fine of slightly over 3 million won, which amounts to just 0.000025 percent of the total sales. This has led to concerns that such minimal fines are ineffective in curbing potential violations,” Kang said.

Weverse CEO Choi acknowledged the issue and stated that corrective measures were implemented, including clearer guidance on customer rights and product delivery timelines.

Democratic Party Rep. Min Hyung-bae brought up the issue of choreography ownership, noting that K-pop choreographers are not fairly credited or compensated for their work. While K-pop companies earn significant revenue from the choreography, the choreographers are often paid a flat fee with no additional compensation for future use of their work.

“One company sets choreography fees at 7 million won, design fees at 2 million won and revision fees at 500,000 won. However, the agency only pays the choreography fee once, while continuing to use the choreography repeatedly to generate billions in revenue,” Min said.

He also highlighted a lack of standardized contracts, leading to ongoing unfair trade practices.

The CEOs of YG, SM and JYP stated that they were not aware of the exact payment details for choreographers, but promised to ensure fair compensation moving forward.

"We fully understand the importance of choreography among the elements that make up K-pop content. In line with your suggestions, if the Ministry of Culture, Sports and Tourism implements the ongoing study and subsequent institutional improvements, we will review them internally and comply accordingly," SM Entertainment CEO Jang said.

JYP Entertainment CEO Jung added, "If the system is reformed, we will proactively consider making improvements in that area."

Likewise, YG Entertainment CEO Yang said, "We will strive to ensure that fair compensation is provided for choreography."