"Abuse of Market Dominance"... Franchise Association Reports Only 'Baemin' to Fair Trade Commission

"Government Urges Measures on Usage Fees Not Subject to Market Economy Principles"

The Korea Franchise Industry Association will report Woowa Brothers, the operator of the delivery platform Baedal Minjok, to the Fair Trade Commission.

Baedal Minjok announced that it will raise the brokerage fee borne by restaurant owners from the current 6.8% to 9.8% (excluding VAT) starting this August. On the 11th, a Baedal Minjok sticker was attached to a restaurant in Seoul. Photo by Jinhyung Kang aymsdream@

On the morning of the 27th, the Korea Franchise Industry Association held a press conference at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, announcing that it will report Baedal Minjok to the Fair Trade Commission for various unfair practices, including significantly raising delivery app usage fees twice while holding a monopolistic position.

Based on legal advice from the law firm Won, the association pointed out that Baedal Minjok violated the abuse of pricing by a market-dominant business operator, and also violated preferential treatment of its own company and demands for most-favored-nation treatment. Jung Hyun-sik, president of the Korea Franchise Industry Association, explained, “While the government has drastically reduced credit card merchant fees from 4.5% to 0.5?1.5% of sales over 13 times since 2007, it has turned a blind eye to significant increases in delivery app usage fees by delivery app companies.”

He added, “Experts view credit card fees and delivery app usage fees not as prices determined by market supply and demand, but as prices set by monopolistic businesses that self-employed individuals have no choice but to accept,” emphasizing, “We urge the government to prepare measures for these usage fees where market failure exists,” and requested, “We ask the Fair Trade Commission to investigate this report swiftly and strictly.”

He also stated, “Through industry opinion gathering, consultations with experts, and advice from law firm Won, we have extensively collected various illegal acts by the three delivery app companies holding monopolistic positions and broadly reviewed the legality of these acts,” and added, “Taking this report on Baedal Minjok’s abuse of market dominance as an opportunity, we plan to continue actively responding to various abuses by delivery app companies in the future.”