Republic of Korea: Announced Korean Fair Trade Commission investigation into Kakao Mobility acquisition of stake in SM Entertainment

On 26 April 2023, the Korean Fair Trade Commission (FTC) initiated an investigation into Kakao’s acquisition of 39.87% participation in SM Entertainment, a K-pop agency that produces albums. In particular, the FTC will review the impact of the vertical merger on the entertainment industry, considering that Kakao operates music streaming services and could eventually modify its algorithms to benefit singers from SM Entertainment. In addition, the FTC will review the potential for Kakao and SM Entertainment to enhance their market power by jointly launching new products or services. The FTC will publish the preliminary findings in 30 days.