Kakao Entertainment fined millions for deceptive marketing practices
South Korea’s entertainment giant faces credibility damage amid reports of a sell off
Kakao Entertainment is facing a hefty fine after being found guilty of deceptive marketing practices.
According to Newsoo Plus, one of South Korea’s biggest music companies manipulated the trust of its consumers by using its digital channels to unethically promote its own content.
Kakao Entertainment is a subsidiary of a South Korean internet company which also owns KakaoPage, a digital marketplace.
The Fair Trade Commission (FTC) ruled the media giant’s practices were illegal and issued a 390 million KRW fine, which is approximately $260,000.
This is the first instance where the FTC has found such practices illegal, which is likely to damage the credibility of Kakao Entertainment in the industry.
The fine comes after reports of Kakao Entertainment being likely to be sold by its parent company due to the sharp downturn in stock markets.
According to The Bell, Kakao recently sent a letter to its shareholders notifying them of its plan to unload the majority stake in its subsidiary.
Founded in 2021, Kakao Entertainment is 66 percent owned by its current parent company. It failed to go public after the 2020 lockdowns.
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