Kakao, which has effectively forced suppliers to use free shipping methods on 'Kakao Gift Delivery', has reached a consent agreement with the Fair Trade Commission and agreed to implement corrective measures. This is the first time an online distribution platform has been subjected to the consent agreement system.
According to the government on the 21st, the Fair Trade Commission finalized the consent opinion regarding the violation of the Large-scale Distribution Business Act that Kakao applied for during a plenary session held on the 15th. Kakao has been accused of restricting suppliers from freely setting delivery fees and imposing commissions on the total product prices including delivery fees.
According to the Fair Trade Commission's investigation, Kakao has restricted suppliers from choosing paid delivery or conditional free shipping methods and has only allowed free shipping methods that include delivery fees. Furthermore, when calculating commissions, they have applied the total price that includes the delivery fees.
Additionally, the delayed issuance of contracts and returns without justifiable reasons were also included in the problematic actions. In response, Kakao proactively applied for a consent agreement before the submission of the review report, and the procedure began in January this year.
With this consent agreement, suppliers will be able to freely set product prices and delivery fees. In addition to 'free shipping' that includes delivery fees, paid delivery with separately priced delivery fees will also be possible, where commissions will only apply to the product price.
Consumers will be able to purchase products for the same aggregates as before. On the product detail screen, the product price and delivery fee will be displayed separately, but the final payment amount will remain unchanged. For instance, if previously a supplier registered a product as '10,000 won including delivery fee', Kakao charged a commission based on the total amount of 10,000 won. However, in the future, if the product price is separated into 7,000 won and delivery fee is 3,000 won, Kakao will only impose a commission on the 7,000 won.
Kakao plans to support suppliers with at least 9.2 billion won for the implementation of the consent agreement. Of this, 6.4 billion won will be used for commission reductions, exemptions from delivery fee payment commissions, and 2.8 billion won will be allocated to marketing expenses such as free advertising, discount promotions, and events.
In conjunction with this, training on fair trade for supplier staff and the introduction of an internal compliance program (CP) will also be implemented. Internal guidelines will be established to prohibit discrimination based on delivery types, and improvements to user interfaces will be made to prevent dark patterns that may cause consumer confusion.
The Fair Trade Commission plans to continue monitoring Kakao's compliance in collaboration with the Fair Trade Adjustment Agency. A Fair Trade Commission official noted, "This decision is the first application of the consent agreement system to an online retailer since its introduction," and added, "We concluded that the corrective measures proposed by Kakao are effective in protecting suppliers' rights and improving transaction order."