"Limits of Self-Regulation in Delivery Apps... Legislation Must Be Careful" [BaeDal App's Betrayal]

⑥ Four Experts' Suggestions: Regulation Measures for Delivery Platforms
Concerns Over Side Effects Such as Impairment of Self-Regulation Ability

Recently, self-employed business owners have been demanding legal measures to regulate delivery app platforms, but academia is united in cautioning against the enactment of new laws. While agreeing that self-regulation has failed, experts point out that legislation such as the "Platform Fair Competition Promotion Act" (Platform Competition Promotion Act) and the "Online Platform Fairness Act (Onple Act)" could cause more side effects than practical benefits.

Agreement on Limits of Self-Regulation... Skeptical About Legislation

On the 24th, Professor Lee Bong-ui of Seoul National University School of Law said in an interview with Asia Economy, "Issues arising from the power imbalance in platforms, such as commissions and delivery fees, were supposed to be handled by self-regulation, but these are difficult to resolve," adding, "Basically, these fall under the jurisdiction of the Fair Trade Commission (FTC), but the FTC has never treated them as a problem."

Choi Su-jeong, a research fellow at the Small and Medium Business Research Institute, said, "The commission issue is the core problem of delivery platforms, and it is difficult for both self-employed business owners and platforms to make concessions," adding, "The platform companies will likely argue that the current commissions are reasonable, so there are limits to resolving this through self-regulation."

There were many skeptical views regarding the Platform Competition Promotion Act being pushed by the FTC. The current high commissions and other issues arise from the power imbalance between platforms and store owners, which differs from the purpose of the Competition Promotion Act that aims to induce fair competition among platforms.

Professor Hong Dae-sik of Sogang University School of Law stated, "The Platform Competition Promotion Act is a law discussed to prevent large-scale platform operators from hindering the business of competing platforms, thereby blocking competition," adding, "It has a completely different purpose and regulatory means from issues like platform commissions and delivery fee sharing."

The Onple Act, which the Democratic Party of Korea is pushing as a party policy, was also seen as not a solution. Professor Lee said, "The Onple Act merely specifies unfair trade practices already prohibited under the Fair Trade Act to fit platforms," adding, "The issue of how to share commissions and delivery fees arises specifically in the delivery platform sector, not in all platforms. The Onple Act, which describes unfair trade between all online platforms and tenant businesses, cannot include special provisions regarding delivery fees."

He continued, "Ultimately, the Onple Act will have to rely on quite broad and general provisions, which would make it similar to the current Fair Trade Act."

Criticism also arose that legislation could undermine the self-purification ability of delivery platforms. Professor Hong said, "The transaction relationship between delivery platforms and store owners is a new type that did not exist before, creating various dynamics and new problems that may also be resolved independently," adding, "If the ability to solve problems independently is not developed and laws derived from traditional relationships are applied as is, it could cut off the potential for self-purification."

Divergent Views on Using Fair Trade Act, 'Shortening Time' as a Task

Opinions were divided on utilizing the existing Fair Trade Act. Professor Lee said, "No law more flexible than the Fair Trade Act can be enacted. Even if strange new forms emerge in the platform market, there is room for dispute," adding, "While it is impossible to provide specific guidelines such as 'delivery platforms must not pass on more than a certain percentage of costs to store owners,' it is possible to regulate with general and abstract provisions, for example, stating that passing on more than 80% is excessive."

Professor Hong said, "I have never heard of a case where the Fair Trade Act's legal limitations prevented platform regulation," adding, "The only problem is that it takes a long time to enforce the law."

On the other hand, Professor Choi Cheol of Sookmyung Women's University Department of Consumer Economics argued, "It is difficult to predict how many more opportunities and transactions will be created in the market transactions we usually regulate," adding, "If a regulatory system suitable for online platforms is not established, it will be inefficient from a regulatory perspective and blind spots may occur."

Researcher Choi said, "Regulation is possible under the Fair Trade Act, but considering the intermediary transaction characteristics of platforms, the likelihood of regulation under unfair trade practices in the Fair Trade Act is low," adding, "I believe new unfair practices considering the unique characteristics of online platforms, such as two-sided effects and lock-in effects, need to be created."

Series Order

<1> Self-employed Business Owners Losing More the More They Sell
<2> How Free Delivery Works
<3> Cries Emerging from Various Places
<4> Why They Have No Choice but to Use 'New Pricing Plans'
<5> Fair Trade Commission's Self-Regulation in Name Only
<6> Expert Recommendations: Delivery Platform Regulation Measures