A delivery motorcycle is parked in front of a Yogiyo store in downtown Seoul. Photo by Hyunmin Kim kimhyun81@
[Asia Economy Reporter Kim Daehyun] The prosecution has requested a fine of 50 million KRW for Woowa Brothers Corp. (formerly Delivery Hero Korea), the operator of the delivery app "Yogiyo," which was indicted on charges of forcing franchise delivery restaurants to comply with the 'lowest price guarantee' for app orders.
On the afternoon of the 11th, Judge Joo Jin-am of the Criminal Division 15 at the Seoul Central District Court conducted the final trial for Woowa Brothers, who was indicted for violating the Fair Trade Act.
On this day, the prosecutor requested that Woowa Brothers be sentenced to a fine of 50 million KRW. It was alleged that Yogiyo interfered with the management of restaurants by demanding changes to sales prices and continuously monitoring violations of the lowest price guarantee system, and terminating usage contracts if the demands were not met.
Woowa Brothers, as the second-largest player in the rapidly growing delivery app market with a market share exceeding 25%, made it difficult for restaurants highly dependent on transactions to refuse demands such as the lowest price guarantee system, according to the prosecution's argument.
On the other hand, Woowa Brothers' defense attorney, claiming 'not guilty,' argued, "We only requested not to discriminate in terms of price and other conditions compared to other apps," and "We did not interfere with which app, between other apps and Yogiyo, the prices would be adjusted."
Furthermore, they contended that the delivery app market has rapidly grown in recent years due to the spread of COVID-19, and it cannot be said that restaurants were highly dependent on transactions with Yogiyo when the lowest price guarantee system was implemented. Ultimately, the lowest price guarantee system promoted competition among delivery apps and revitalized the delivery food market, positively impacting consumers and restaurants.
Judge Joo concluded all the proceedings on this day and set the sentencing date for the 25th.
Earlier, the prosecution indicted Woowa Brothers, claiming that Yogiyo forced restaurants to comply with the lowest price guarantee system and imposed disadvantages such as contract termination if violated.
Woowa Brothers, through its own monitoring and consumer reports, identified 144 restaurants that did not comply with the lowest price guarantee system from July 2013 to December 2016, demanding price reductions on orders, price increases on other delivery apps, or changes in delivery fees. It was investigated that contracts with 43 restaurants that did not comply were terminated. Yogiyo's lowest price guarantee system was immediately suspended once the Fair Trade Commission's investigation began.
The Fair Trade Commission detected such illegal activities in June 2020 and imposed corrective orders along with a fine of approximately 460 million KRW on Woowa Brothers.
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