K-Pop’s most popular boy group, BTS, was recently involved in “chart manipulation” allegations after a past legal feud between BIGHIT MUSIC and an individual known as “Mr. A” resurfaced on online spaces. Though the company denied all accusations, Kyunghyang has reported that the judiciary and investigative authorities explicitly referred to the incident as “chart manipulation,” “illegal marketing,” and “sajaegi marketing.”
| Forbes
In August 2017, Mr. A was sentenced to one year in prison for joint extortion after he threatened to release information about illegal marketing to the media unless he was paid. This resulted in him extorting 57 million won on eight occasions. The court’s decision then led to speculations that BTS might have engaged in illegal marketing practices, such as chart manipulation, which BIGHIT MUSIC has consistently denied.
“The marketing activities mentioned in the criminal’s threats of extortion were merely his own assertions, and what he referred to as unconventional marketing was actually standard online viral marketing. Mr. A’s claims have no connection to the advertising and promotional contracts he had with our company. The financial damages were inadvertently incurred during personal attempts to protect the artist’s image.
As the victims of the threats, we immediately reported it and actively participated in the investigative proceedings. The result was that if it becomes common for the media to damage a company’s image by reporting as facts the unilateral claims of corporate misconduct during such extortion cases, no entertainment company will be able to stand up proudly against such threats in the future.”
— BIGHIT MUSIC
| Donga.com
However, despite BIGHIT’s denial, the court highlighted contrary findings. Mr. A and his associates disguised as third parties who had hacked emails to acquire data on illegal marketing conducted by the agency representing the company they worked for. The court also mentioned that Mr. A lied about being blackmailed with hacked marketing data concerning BTS, a client of the entertainment agency he served, and exploited this fabricated scenario to extract ₩57.0 million KRW (about $41,400 USD) under false pretenses.
While acknowledging that the victims had engaged in unconventional marketing practices that provided a pretext for blackmail, the court noted that the actual financial damage was limited to ₩42.0 million KRW (about $30,500 USD).
| BIGHIT MUSIC
Thus, contrary to the agency’s claims, the court accepted the findings that Mr. A had threatened to expose manipulations of music charts and other acts related to the group — validating the accusations of “illegal marketing” and “sajaegi marketing.” Furthermore, the court pointed out that BIGHIT MUSIC’s own marketing practices had contributed to the situation.
Offering a legal point of view, attorney No Jong Eun from the Law Firm JoonJae confirmed that the court had recognized “illegal marketing.”
The ‘illegal marketing’ referred to in this case means ‘sajaegi marketing,’ and the court recognized this fact in its judgment.
To refer to ‘sajaegi’ as viral marketing is no different from calling illegal practices legal. There is no legal precedent for criminal punishment of sajaegi marketing, but the judgment in Mr. A’s case clearly indicates that it was present.
— No Jong Eun
| BIGHIT MUSIC
Meanwhile, in response to these allegations, HYBE has announced legal actions. BIGHIT MUSIC noted, “There have been multiple organized attempts recently to tarnish and slander BTS. We made our position clear in 2017 and maintain that stance.“
