[Exclusive] Delivery Platform 'Self-Inspection'... Fair Trade Commission's Unofficial Warnings Zero in One Year [BaeDal App's Betrayal]

⑤Patterned Fair Trade Commission Self-Regulation
Zero Informal Warnings in 1 Year... Zero Mediation Cases by Dispute Resolution Council
Delivery Platform 'Self-Inspection' Method "Difficult to Ensure Objectivity and Fairness"

As damages caused by delivery platforms spread, the government has also begun discussions on regulating delivery platforms. The Yoon Seok-yeol administration declared that delivery platforms would be entrusted to 'self-regulation' in line with its national policy direction and prepared related measures. A representative example is the 'Delivery Platform Private Self-Regulation Organization,' launched in August 2022 under the leadership of the Fair Trade Commission (FTC).

The FTC decided that the self-regulatory organization, which includes five delivery platforms such as Baedal Minjok (Baemin), Coupang Eats, Yogiyo, as well as the Korea Federation of Micro Enterprise, and the Korea Federation of Small and Medium Business, would propose self-regulation measures and win-win solutions and check and announce the implementation results of the platforms once a year. The main point was to improve unfair delivery platform terms and conditions (contracts), such as notifying tenant businesses of the reasons and details of changes at least one month in advance when signing, changing, or terminating service contracts.

Delivery Platforms' 'Self-Inspection'... No Informal Warnings Either

According to Asia Economy's investigation, during the past year since the self-regulation was implemented, the FTC has not taken any official or unofficial measures, including 'informal warnings,' against the five delivery platforms. The FTC is supposed to issue an informal warning first if a delivery platform fails to implement the self-regulation measures without reasonable grounds, and if it still does not comply, publicly disclose the status and details of non-compliant businesses.

The FTC conducted the first inspection from June to August last year through written investigations and official/unofficial meetings and the second inspection from December last year to January this year but found no issues.

An FTC official said, "Based on the implementation results over the past year, we discussed and evaluated with stakeholders such as business groups belonging to the delivery platform self-regulatory organization, the Korea Federation of Micro Enterprise, and the Korea Federation of Small and Medium Business," adding, "We judged that the five platform operators mostly complied well with the self-regulation measures."

Han Ki-jung, Chairman of the Fair Trade Commission, is delivering a keynote speech at the "Delivery Platform Self-Regulation Plan Presentation" held last March at the Korea Federation of Small and Medium Business in Yeouido, Seoul.
[Photo by Kang Jin-hyung]

However, it was confirmed that there were procedural loopholes in the inspection of delivery platforms' self-regulation implementation. Summarizing related information from self-regulatory organization officials, the evaluations of self-regulation implementation held twice so far were conducted in a way that delivery platform operators 'self-inspected.' The FTC delivered a 'self-regulation checklist' to the delivery platform operators, who then filled it out themselves and submitted it. The FTC compiled the evaluation results from each operator and shared them with the Korea Federation of Micro Enterprise and the Korea Federation of Small and Medium Business. These organizations were then given opportunities to express their opinions.

An official participating in the self-regulatory organization said, "In fact, we did not participate as an institution to inspect the implementation of self-regulation. We only received evaluation reports similar to the press releases issued by the FTC," adding, "Even in the two meetings we attended, discussions mainly focused on win-win measures for the next year, and there was no evaluation of the delivery platforms' implementation results over the past year."

Experts pointed out that the current government's self-regulation evaluation method is difficult to guarantee fairness and objectivity. Professor Choi Cheol of the Department of Consumer Economics at Sookmyung Women's University said, "If organizations like the Korea Federation of Micro Enterprise did not participate from the evaluation process, it seems to have procedural loopholes," adding, "Even if the results were shared later, it is difficult to guarantee the fairness and objectivity of the evaluation. It can be seen that stakeholders who are directly or indirectly affected by the delivery platform market were excluded."

Clear Limits of Self-Regulation... 'Commission Fees' Issue Also Omitted

Experts pointed out that this highlights the limitations of delivery platform self-regulation. Since it is a non-binding 'agreement,' it inevitably relies on each operator's self-effort and self-purification ability, and in the case of delivery platforms, there is no association or organization representing the market, making it harder for self-regulation to be effective.

Professor Choi said, "Financial institutions or convenience stores have representative associations and organizations that coordinate and compile differing opinions to create an atmosphere where self-regulation is well implemented," adding, "However, in online e-commerce and delivery platforms, there is no central association, so the motivation to keep agreements or self-purify is weak."

Han Ki-jung, Chairman of the Fair Trade Commission, is delivering a keynote speech at the 'Delivery Platform Self-Regulation Plan Presentation' held last March at the Korea Federation of Small and Medium Business in Yeouido, Seoul.
[Photo by Kang Jin-hyung]

The omission of the most important 'commission fees' issue from the win-win measures is also cited as a critical limitation.

Professor Lee Bong-ui of Seoul National University Law School said, "Looking at the self-regulation measures, they seem to have been created only to resolve private disputes between platform operators and store owners to some extent. The current problems of excessive cost shifting and preferential treatment by platform companies cannot be resolved by self-regulation," adding, "This is a matter concerning fair trade order rather than one-on-one disputes, so the FTC should intervene directly."

Series Order

<1> Self-Employed Suffering Losses the More They Sell
<2> How Free Delivery Operates
<3> Cries Emerging from Various Places
<4> Why They Have No Choice but to Use the 'New Pricing Plan'
<5> Superficial FTC Self-Regulation
<6> Expert Recommendations: Delivery Platform Regulation Measures