[Reporter’s Notebook] Regulation of Delivery Platforms Requires Direct Action from the Fair Trade Commission

"It's like entrusting fish to a cat."

This comment was posted under the article titled , published by the reporter on the 21st of last month. The article pointed out that the 'Private Self-Regulatory Organization for Delivery Platforms,' launched last year under the leadership of the Fair Trade Commission (FTC), had not taken any official or unofficial disciplinary actions against the five delivery platforms it monitored for a year.

Under that comment, a rebuttal appeared saying, "Isn't the FTC staying silent because there is no problem?" Was there really no issue in the delivery platform market, or did the FTC fail to do its job?

Simply put, it is true that there were no problems within the 'framework presented' by the FTC. This is because the self-regulatory organization’s proposed coexistence measures completely omitted the most important and core issue demanded by self-employed business owners: the right to negotiate commissions. Organizations such as the Korea Federation of Small and Medium Business and the National Franchisee Association have been demanding the 'right to negotiate commissions' against platforms due to excessive fees charged by delivery platforms.

Han Ki-jung, Chairman of the Fair Trade Commission, is delivering a welcoming speech at the "Delivery Platform Self-Regulation Plan Presentation" held on March 6, 2023, at the Korea Federation of Small and Medium Business in Yeouido, Seoul. Photo by Kang Jin-hyung aymsdream@

However, this issue was never even brought to the negotiation table. Since it is an agreement, it is impossible to enforce any terms without the platform's consent. As a result, the self-regulatory measures mainly focused on improving unfair delivery platform terms and conditions (contracts). This is why the regulatory measures are criticized as being hollow.

Meanwhile, the damage has spread widely, not only to self-employed business owners but also to consumers. Store owners, whose total monthly burden from commissions has more than tripled, have raised prices on food and 'minimum order amounts' to defend themselves, which has led to consumer price inflation. The franchisee associations of the top five nationwide brands, including Kyochon and BHC, have already begun raising chicken prices to around 30,000 won.

It is impossible to find a fundamental solution without addressing the commission issue. Excessive commissions are pushing store owners to the brink of survival, and this burden is passed on to consumers, which is the core of the problem. For the self-regulatory organization to fulfill its role, the commission issue must be brought to the negotiation table. Ignoring this issue is why the FTC is criticized for not doing its job.

Despite the rapid growth of the domestic delivery market after COVID-19, the FTC has been passive in regulating delivery platforms. Even when Kakao Mobility was fined 25.7 billion won for 'call bundling,' the delivery platform market was left untouched, and recently, the FTC only issued a corrective order regarding Baemin’s UI design and preferential treatment of its own services.

It is time for direct intervention by the FTC, not superficial self-regulation. The self-employed business owners whom Asia Economy met while preparing the 'Betrayal of Delivery Apps' series all set aside their livelihoods to participate in interviews. Their voices, clearly explaining the damages they have suffered, carried a sense of solemnity. This also conveyed how desperate the situation is.

How long will the FTC continue to just watch their cries? Practical measures are needed to resolve the problems arising from the power imbalance between delivery platforms and store owners.