The Dark Side of Delivery App Monopolies: "Market Order Must Be Redesigned" [The Fall of the Chicken Republic] ④

Short-term Relief Expected, but Side Effects Feared
Emphasis on Transparency, Addressing Monopoly, and Social Consensus

The domestic delivery market's monopolistic structure, dominated by platforms, is threatening the survival of small business owners. When market power becomes concentrated on one side, the resulting costs are ultimately borne by society as a whole. Rather than focusing on short-term price-cutting competition, it is time to redesign the overall transaction structure. The government must establish a framework for fair competition through institutional design, franchise headquarters need to strengthen their bargaining power, platforms should transparently disclose commission fees and exposure criteria, and small business owners must build a sustainable competitive foundation.

According to industry sources on October 23, there is a growing consensus that government intervention is inevitable in the delivery platform market due to its monopolistic structure. Jung Sujeong, a researcher at the Korea Small Business Institute, stated, "The domestic delivery platform market is monopolized by two companies, which limits the choices available to store owners. Public delivery applications have low market share and are not a viable alternative."

However, the focus should not be on simple 'restraint,' but rather on sophisticated 'design.' While 'restraint-based regulation' is limited to capping commission fees or restricting advertising costs, 'design-based regulation' aims to restructure the institutional framework so that autonomous market competition can function properly.

The core issue is not the commission rate. The essence of the problem lies in the distortion of market order. The industry shares the view that the government should act not merely as a 'supervisor,' but as a 'market designer.' The asymmetrical structure created by platforms needs to be corrected, and an environment where autonomous competition can thrive must be restored.

Yonhap News Agency

Enhancing Transparency Is the First Step

Academia unanimously emphasizes that "transparency is the starting point for normalizing the market." Yoon Dongyeol, a professor at Konkuk University, said, "The current commission structure mixes advertising fees and brokerage commissions, making it difficult for small business owners to accurately determine their actual burden. By separating and disclosing each item and regularly publishing the average levels, price competition between platforms can emerge."

He added, "In certain regions, only apps with commission rates below a set standard could be allowed to operate, or platforms could reduce dependence by integrating commerce functions dedicated to local business districts. If local governments establish digital cooperative models that support joint logistics and marketing, it would strengthen their bargaining power against platforms."

Park Miyoung, legislative researcher at the National Assembly Research Service, stated, "Platforms must be required to disclose the basis for revenue calculations and settlement details. Since the essence of the commission controversy is a lack of trust, securing transparency is the starting point." She added, "The government's role is not to suppress prices, but to restructure the system so that the market can engage in rational competition on its own."

A Dual Track of Law and Voluntary Efforts... The Need for a Co-regulation System

There are also concerns that relying solely on legal frameworks has limitations, and that sustainable competitive order requires parallel internal self-regulation within the market. Cho Heesu, a researcher at Konkuk University, said, "Platforms should be included as subjects under the Fair Franchise Transactions Act, but to avoid stifling innovation, a co-regulation system that combines legal standards with voluntary self-regulation is necessary." He also suggested, "A dedicated dispute resolution body should be established, and standard contracts and settlement forms should be distributed as administrative guidelines. Some monitoring and enforcement functions should be delegated to local governments to enhance responsiveness on the ground."

Voluntary efforts from the private sector are also needed. The industry should simultaneously commit to disclosing commission fees, distributing standard contracts, and unifying settlement forms through voluntary agreements. Lim Younggyun, professor emeritus at Kwangwoon University, warned, "If franchise headquarters allow themselves to remain dependent on platforms, the competitiveness of franchise businesses could collapse. They need to strengthen their bargaining power by building their own delivery networks or securing alternative options such as connecting with public apps."

He also pointed out, "The structure should be changed so that delivery costs are shared among consumers, headquarters, and platforms. The current structure, where consumers bear almost none of the cost and store owners shoulder most of it, cannot be sustained." Professor Lim added, "Fairness must be enhanced through a co-regulation system that combines legal and voluntary regulations."

The National Assembly Draws Its Sword with a Cap System

The first card drawn by the National Assembly is the 'commission fee cap system.' The Democratic Party of Korea has proposed an amendment to the Small Business Protection Act, which would apply preferential usage fees to stores below a certain size and set an upper limit on overall commission rates to protect small business owners. The commission cap for delivery apps would be set by presidential decree, and fixed fees would be applied to small businesses, essentially creating a flat-rate system. This was both a campaign pledge and a national policy task of President Lee Jaemyung.

Kim Woni, a Democratic Party lawmaker, said, "Baemin and Coupang Eats have reigned as absolute powers, imposing excessive burdens on both store owners and riders. The cap system aims to change this structure and will serve as a lever to help small business owners regain bargaining power." He explained that curbing the platforms' dominant position could shift the starting point of negotiations.

However, the implementation process has not been smooth. Initially, the Fair Trade Commission was expected to oversee the process, but it stepped back, citing inconsistency with competition policy principles. Currently, the Ministry of SMEs and Startups is working on measures to protect small business owners, such as the commission cap for delivery platforms. However, there are concerns about the ministry's limited regulatory authority and enforcement power.

Some have also voiced concerns about potential side effects. Lee Yuseok, a professor at Dongguk University, said, "According to data from the Ministry of Agriculture, Food and Rural Affairs and cost simulations, setting the commission cap at 6.8 percent would reduce food service industry sales by about 2.5 trillion won and operating profit by about 1 trillion won. The key is not simply imposing a cap, but how the market structure itself is designed."

Yoo Youngguk, a professor at Hanshin University, pointed out, "If we try to solve the single issue of delivery app commissions through legislation, the discussion becomes confined to the bill itself. The approach should focus on rationally designing the market structure rather than on legislation."