{"id":2207053,"date":"2024-11-07T11:29:59","date_gmt":"2024-11-07T02:29:59","guid":{"rendered":"https:\/\/koreapro.org\/?p=2207053"},"modified":"2024-11-07T16:28:50","modified_gmt":"2024-11-07T07:28:50","slug":"south-koreas-food-delivery-giants-face-antitrust-scrutiny-amid-rising-fees","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/11\/south-koreas-food-delivery-giants-face-antitrust-scrutiny-amid-rising-fees\/","title":{"rendered":"South Korea\u2019s food delivery giants face antitrust scrutiny amid rising fees"},"content":{"rendered":"
The COVID-19 pandemic sparked explosive growth in South Korea\u2019s food delivery industry, with platforms like Baedal Minjok (Baemin), Coupang Eats, and Yogiyo quickly becoming essential services for consumers and restaurants alike.<\/span><\/p>\n Together, these three platforms control <\/span>96%<\/span><\/a> of South Korea\u2019s food delivery market.<\/span><\/p>\n But as the pandemic waned, these platforms faced new challenges \u2014 most notably, rising costs and fierce competition that are squeezing restaurant owners and putting pressure on the market.<\/span><\/p>\n In response to mounting complaints about monopolistic practices and increasing commission fees, South Korea\u2019s Fair Trade Commission (FTC) <\/span>launched an investigation<\/span><\/a> into the three delivery giants in July. This investigation marks a critical moment in the industry\u2019s evolution, as questions about fair competition, consumer impact and regulatory intervention come to the forefront.<\/span><\/p>\n RISING COMMISSION FEES<\/b><\/p>\n The catalyst for the FTC\u2019s investigation was Baemin\u2019s controversial decision to <\/span>increase its commission fees<\/span><\/a> for restaurant owners from 6.8% to 9.8%. This move sparked outrage from restaurant owners, industry unions and civil society groups, who argue that the additional costs are unsustainable for small businesses already struggling with thin margins.<\/span><\/p>\n Critics of the fee hike, including the Korea Franchisee Union and the Rider Union, argue that such increases disproportionately affect small and medium-sized enterprises (SMEs).<\/span><\/p>\n \u201cInstead of sharing responsibility, these platforms push business owners to their limits,\u201d Lee Eun-hee, a professor of consumer science at Inha University, told <\/span>Korea Pro<\/span><\/i>. \u201cRestaurants are now handling higher prices for delivery orders than for take-out than they did before.\u201d<\/span><\/p>\n Industry experts and business owners alike suspect that the fee hikes may be driven by external financial pressures on Baemin\u2019s parent company, Woowa Brothers Corp. Woowa paid out over $292 million (<\/span>400 billion won<\/span><\/a>) in dividends to its German parent company, Delivery Hero, in 2023. This was the largest payout since Delivery Hero acquired Baemin in 2019.<\/span><\/p>\n Some view the increased fees as a way to offset these costs, exacerbating tensions between platforms and restaurants.<\/span><\/p>\n