"Abusing Power"...Both Ruling and Opposition Parties Criticize Delivery Apps [2024 National Audit]

National Audit of the Ministry of SMEs and Startups on the 8th
Criticism of Delivery Platform Fees and Unfair Terms Continues
"Not Woowa Brothers but Ugly Brothers"

At the National Assembly's audit of the Ministry of SMEs and Startups held on the 8th, criticism regarding delivery platform fees and unfair terms and conditions continued regardless of party lines.

On that day, at the National Assembly's Industry, Trade, Energy, SMEs and Startups Committee, Kim Won-i, a member of the Democratic Party of Korea, stated, "I will talk about the blatantly unfair terms and conditions of Baedal Minjok, which go beyond visible power abuse to openly engage in unfair terms and contract abuses."

Rep. Kim pointed out, "Article 8 of the Baemin Store Seller Terms and Conditions stipulates that the company does not provide any guarantees and that the seller bears all related responsibilities, engaging in power abuse," adding, "This appears to be a violation of the Terms and Conditions Act."

Regarding the Baemin 1 Plus terms, Rep. Kim said, "Article 7 on store exposure states, 'The company has the authority to decide the order, area, distance, and information of store exposure within the application,' and 'If adjustments or changes significantly affect the rights or obligations of the store owner, the company may implement them at its discretion after prior notice.' The app's store exposure order directly affects consumer choice and significantly impacts sales, so isn't this clause, which allows Baemin to unilaterally implement changes with only prior notice even if it negatively affects store owners, a serious abuse of power?"

Minister Oh Young-joo of the Ministry of SMEs and Startups is reporting on business operations during the National Assembly's Industry, Trade, Energy, SMEs, and Startups Committee's audit of the Ministry of SMEs and Startups on the 8th. Photo by Hyunmin Kim kimhyun81@

Seo Wang-jin, a member of the Innovation Party, said, "From January to September this year, Baedal Minjok changed its terms and conditions fourteen times in total, adding, revising, or deleting content in 96 clauses," adding, "These changes are applied unilaterally without proper explanation or opportunities for negotiation."

Rep. Seo also stated, "A transparent fee structure must be created, balanced exposure opportunities properly provided, and phased fee reductions actively pursued," and criticized, "If government policies are not precise, there are many criticisms that government budgets only fatten delivery platforms."

Park Hyung-su of the ruling People Power Party also said, "Baemin holds an overwhelming monopoly position in the delivery app market with a market share of 58.7% in 2022, 66.6% in 2023, and 61.4% as of June this year, and is criticized for frequently changing terms and fees to maximize its own profits by exploiting this position," adding, "I think the name 'Woowa Brothers' should be changed to 'Ugly Brothers.'"

Park continued, "I believe there is a very high possibility that this constitutes unfair conduct under the Fair Trade Act," and asked Minister Oh, "It has been reported to the Fair Trade Commission, and I think they will make a sufficient judgment, but does the Ministry of SMEs and Startups intend to express its position to the Fair Trade Commission?"

Minister Oh replied, "We have sufficiently stated that issues unfairly affecting small business owners due to a dominant market position must be corrected," adding, "If the investigation results in sanctions and the case is transferred to us, we will also be involved in a broad sense through work reports and penalty systems."

Independent lawmaker Kim Jong-min argued that a hearing is necessary. Rep. Kim said, "There were quite a few questions about Baemin regardless of party lines, which shows the problem is very serious," adding, "If six to seven lawmakers are questioning this issue, the Industry, Trade, Energy, SMEs and Startups Committee should hold a hearing on this matter, and I hope there will be an opportunity to examine it in depth after the audit."