Small Business Association Press Conference Urging Regulation on the 6th
Demand for Enactment of Fair Competition Promotion Act for Platforms like Coupang
"If You Work with Platforms, You Run at a Loss; If Not, You Go Bankrupt"
"The commission taken by accommodation applications alone reaches 30%."
On the 6th, small business owners gathered and raised a unified voice appealing for the regulation of 'monopolies and unfair practices by major platforms' such as Coupang, Baedal Minjok, Yanolja, and Yeogi Eottae. They stated that due to the 'gapjil' (abuse of power) by platforms, small business owners are losing their market and facing increasing burdens, causing significant difficulties.
The Korea Federation of Micro Enterprise Associations held a press conference at the Forest Vision Center in Yeouido, Seoul, on the morning of the same day, making these claims. The event was held to demand the enactment of the Fair Trade Commission's 'Platform Fair Competition Promotion Act,' which calls for regulation of platform monopolies and unfair practices.
The Korea Federation of Micro Enterprise held a press conference urging platform regulation on the 6th at the Yeouido Forest Vision Center. (Photo by Korea Federation of Micro Enterprise)
The Platform Act targets a few monopolistic platforms that have significant power over the platform market and includes provisions to sanction unfair practices using their dominant market position. The Fair Trade Commission officially announced the 'Platform Act' in December last year but faced industry backlash and shifted its stance to a 'full review of the bill' in February.
Attendees at the event included Oh Se-hee, President of the Korea Federation of Micro Enterprise Associations; Yoo Ki-jun, Senior Vice President of the same federation; Yoo Deok-hyun, President of the Seoul Small Business Federation; Jeong Gyeong-jae, Representative of the Korea Accommodation Industry Association; Lee Ki-jae, Representative of the Korea Pet Industry Association; and Jang Yu-jin, Representative of the Korea Chauffeur Association.
Senior Vice President Yoo Ki-jun emphasized that platforms should focus on their original roles and stop encroaching on neighborhood businesses. He pointed out issues such as platforms using monopoly information obtained through mediation to appear as 'players' in the market.
In the case of the accommodation app Yanolja, it has been criticized for monopolizing the accommodation industry by owning hotel brands and operating them independently. The real estate platform Zigbang is also criticized for creating a structure that monopolizes real estate brokerage by utilizing exclusive information.
Jeong Gyeong-jae, President of the Korea Accommodation Industry Association, appealed, "Accommodation apps take 25-30% of sales as commissions, increasing the burden on small business owners," adding, "If you don't join the platform, you go bankrupt; if you join, you operate at a loss."
Jeong explained that currently, 92% of small and medium accommodation businesses are registered with Yanolja, and 80.4% with Yeogi Eottae. Since 64% of their average monthly sales come through accommodation apps, their sales dependency on online platforms is high.
Jang Yu-jin, President of the Korea Chauffeur Association, also stated, "Large corporate platforms like Kakao Mobility and T Map Mobility have recently entered the chauffeur market directly, capturing over 50% market share," and claimed, "They are driving out small business owners through predatory pricing policies that prioritize their own calls."
Along with this, the small business sector urged platforms to stop unfair practices that cause excessive costs by abusing their monopolistic positions.
Yoo Deok-hyun, President of the Seoul Small Business Federation and a restaurant operator, explained, "If sales are 10 million won, 680,000 won must be paid as commission to delivery apps," adding, "Coupang Eats and Yogiyo charge commissions exceeding 10%, and sometimes the delivery fee cannot be set by the business owner." He appealed, "Not giving me the right to set prices for what I sell is gapjil (abuse of power)."
Lee Ki-jae, President of the Korea Pet Industry Association, pointed out that Coupang holds a high 30% market share in the pet market and engages in unfair and foul practices. He strongly argued, "Coupang demands suppliers to provide products at the lowest price, and if they do not comply, it suspends transactions, putting small business owners in extreme situations," adding, "Platforms that directly harm and affect small business owners to the extent of controlling the market must all be included in the law."
Finally, President Oh Se-hee said, "As platforms hold the lead in distribution market channels, small business owners are facing many difficulties on a tilted playing field," and added, "The Platform Act, which will resolve the deepening platform monopolization regardless of industry, must be enacted as soon as possible."
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