Fair Trade Commission to Investigate Allegations of Unfair Support by Lee Soo-man's Private Company?

The Fair Trade Commission (FTC) is drawing attention as to whether it will launch an investigation into Like Planning, the personal company of former SM Chief Producer Lee Soo-man, amid the management rights dispute at SM.

According to industry sources on the 26th, the FTC has recently been monitoring allegations of unfair support raised during SM's management rights dispute.

Like Planning is the personal company of former Chief Producer Lee Soo-man and has received royalties and other payments from SM Entertainment for over 20 years. The amount is reported to have reached around 24 billion KRW in 2021 alone, which corresponds to about one-third of SM's operating profit.

If SM unfairly supported Like Planning by adding unnecessary transaction steps and funneling work to it, this could constitute an unfair support act under the Fair Trade Act. For an unfair support act to be established, it must be objectively proven that the transaction conditions were significantly more favorable compared to normal levels, and that this led to restricted competition in the relevant market.

However, the FTC is reportedly taking a cautious stance on launching an investigation without concrete evidence of specific allegations.

[Image source=Yonhap News]