Online lodging reservation platforms Yanolja and Yeogi-eottae were caught by competition authorities for combining advertising and discount coupons for sale, with undiscarded discount coupons that consumers did not use being rendered void instead of returning them to the lodging operators. The coupons that were burned amounted to about 40 billion won.
The Fair Trade Commission on the 12th imposed a penalty surcharge of 540 million won and 1 billion won on Yanolja and Yeogi-eottae, respectively, for violating the Monopoly Regulation and Fair Trade Act, and issued corrective orders.
According to the Fair Trade Commission's investigation, Yanolja sold advertising services displayed at the top of the application screen combined with coupons from February 2017 to May last year for small lodging establishments (motels). For example, 10-25% of the advertising expense of 1 million to 3 million won per month was paid in coupons. Here, the coupon is one that consumers can use to discount the price when making a room reservation, serving as a promotional tool to lure consumers.
Once the contract period for the advertisements (usually 1 month) ended, Yanolja discarded all unused coupons. If the lodging operator extended the advertisement, they reissued the remaining amount of the coupon for the next month only once. However, unused coupons that were rolled over were eliminated. The amount of the coupons that disappeared in this manner was 1.2 billion won. Yanolja stopped selling related products in May last year while the Fair Trade Commission's investigation was ongoing.
Yeogi-eottae has continued to sell similar products with the same structure since June 2017. Yeogi-eottae set the validity period of the coupons to just one day, causing any unused coupons on the same day to be immediately voided. There were no measures to reissue or refund them on other days. The value of the coupons that were rendered void in this manner amounts to 35.9 billion won. Yeogi-eottae recently notified the Fair Trade Commission of its intention to stop selling related products.
The Fair Trade Commission determined that the actions of both companies in rendering unused coupons void constituted an abuse of their superior transactional status, providing undue disadvantages to the lodging operators. The conclusion of the Fair Trade Commission is that the lodging operators suffered financial losses as the unused coupons disappeared despite having already paid part or all of the coupon cost included in the advertising expenses.
While the scale of the voided coupons shows that Yanolja lost 1.2 billion won and Yeogi-eottae lost 35.9 billion won, nearly a 30-fold difference, the difference in penalty surcharges is less than 500 million won. This is due to the maximum fixed penalty surcharge of 1 billion won under the law for such actions.
The Fair Trade Commission stated, "The voiding policy of unused coupons by the two platforms does not conform to normal transactional practices," and noted, "To create a fair ecosystem, we will take strict measures when violations of the law are confirmed."