It has been decided that if a concert is canceled due to the fault of the production company, that company must not only give full refunds for tickets but also pay an additional 10% for compensation.
The Korea Consumer Agency's Consumer Strife Arbitration Committee recently held a conference and settled a verdict on the dispute regarding the canceled 'SM TOWN Live '09' concert that was to be held by both SM Entertainment and Dream Maker Entercom.
According to the committee, the two companies put the concert on hold indefinitely on August 7th, ten days before it was to be held and refunded all tickets. The reason given for the postponement was the exclusive contract suspension injunction filed by three members of TVXQ against SM Entertainment.
However, 729 people who bought tickets stated, "Because the concert was suddenly canceled, we had to pay cancellation charges on all events we had planned for the concert as well as on all transportation for overseas and rural area fans," and filed for a group strife request that demanded additional compensation.
The committee made a verdict of, "SM Town Live concert is an event that is held every year and as plans to reopen the concert were not made even to this day and tickets were refunded, this concert is not postponed indefinitely, but unable to be carried out at all."
They also stated, "The reason for the indefinite postponement was something that could have been predicted and stopped beforehand, so the fault of the breach of contract for the concert lies on SM Entertainment."
Regarding SM Entertainment's statement that, 'Dream Maker Entercom was in charge of planning, producing and promoting the concert so we are not at fault and should not have to pay compensation,' the committee stated, "When taking into consideration all factors such as concert poster outlines, mentioned items on concert tickets, reports and press conferences, both companies are contracting parties of the concert."
The committee also told both companies that they had to pay a total of 9,130,750 Won (approximately 8,200 USD) in additional compensation.
According to the 'Consumer Strife Settlement Criteria', if a production company cancels a concert due to reasons related to the company, they must fully refund tickets as well as pay an additional 10% of the ticket price as compensation.
A representative of the committee said, "This is the first decision that has put the brakes on companies who cancel or indefinitely postpone concerts and just give refunds for the tickets. It is also the first decision to recognize the compensation responsibilities of such companies with regards to the Consumer Strife Settlement Criteria."