The Fair Trade Commission has rejected a 360 billion won support plan proposed by Baemin and Coupang Eats.
According to industry sources on June 18, the Fair Trade Commission held plenary sessions on May 27 and June 10, during which it dismissed the request for the commencement of a consent decree procedure submitted by Woowa Brothers, the operator of Baemin, and Coupang, which runs Coupang Eats.
A consent decree allows businesses under investigation by the Fair Trade Commission to propose corrective measures before a determination of wrongdoing is made. If the commission finds the measures acceptable, the case can be resolved quickly.
On May 7, Baemin applied for the consent decree procedure regarding allegations of preferential treatment for its own delivery service and misleading advertising about delivery times. In its proposed corrective measures, Baemin outlined a 300 billion won support plan over three years, which includes reducing fees for partner restaurants.
Coupang submitted its request for a consent decree on April 9, addressing the preferential treatment allegations. However, it excluded the bundling issue from its application. Coupang announced plans to invest 60 billion won over four years to support partner restaurants affected by its Wow Store operations, along with a proposal to remove the preferential treatment requirement.
Despite these proposals, the Fair Trade Commission determined that the applications did not meet the criteria for initiating a consent decree. The commission noted that numerous partner restaurants and consumers were affected by the companies' violations, resulting in significant anti-competitive effects. It also pointed out that some of the proposed support measures overlapped with existing promotions and lacked specificity regarding the scale of compensation.
In response, five organizations, including the Small Business Association, the National Merchants Association, the Korean Restaurant Association, the Korean Franchise Association, and the National Cafe Owners Cooperative, immediately protested and requested a review.
In a statement, the five groups said, "The Fair Trade Commission's decision jeopardizes opportunities for reducing delivery app fees and undermines various self-help measures for small businesses. The commission must take responsibility for the chaos this decision will cause among small business owners, as it disregards their opinions and makes a mechanical judgment."
Baemin expressed disappointment, stating, "Woowa Brothers proactively implemented corrective measures, including the elimination of the preferential treatment requirement and improvements in delivery quality and settlement capabilities, through this consent decree application."
A Coupang Eats representative said, "We submitted a consent decree proposal that actively considered the cooperation with partner stores and will sincerely explain our position during the upcoming review process."
* This article has been translated by AI.
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