The Korea Fair Trade Commission has sanctioned the acquisition of 39.87% of SM Entertainment’s shares by Kakao, contingent upon a three-year monitoring period of Kakao’s music streaming service Melon. The regulatory body’s decision comes amidst concerns regarding the potential for reduced market competition due to Kakao’s leading position in digital music planning, production, and distribution, alongside SM Entertainment’s prominence in the same field. In an effort to prevent any anti-competitive behavior, the Korea FTC mandates that all competing streaming platforms must have equal and timely access to digital content produced by Kakao and associated companies. The FTC emphasizes that unless a compelling reason exists, the provision of digital music and content cannot be denied to these platforms. To ensure compliance, an examiner will supervise Melon’s operations, particularly watching for any preferential treatment of Kakao’s subsidiaries.

Digital Music Distribution, Entertainment and Media,South Korea