The Fair Trade Commission has begun sanction procedures against major delivery app operators, including Baemin and Coupang Eats, on suspicions of demanding a "most-favored-nation treatment" clause and engaging in "tying" practices.
On the 13th, the commission said it sent a review report on unfair trade practices by delivery app operators. The review report is a kind of "indictment" that contains matters the Fair Trade Commission's secretariat judged to constitute legal violations, and the full commission will decide whether to impose sanctions.
The key question in this case is whether actions by delivery app operators that required restaurants on their platforms to "not set prices higher than on other platforms" amount to a violation of the most-favored-nation clause. The commission is also reviewing whether Coupang's structure of bundling Coupang, Coupang Eats, and Coupang Play through its "Wow Membership" constitutes tying (combined sales).
Kim Moon-sik, Director General of the Fair Trade Commission's Market Surveillance Bureau, met with reporters at the Government Complex Sejong that day and said, "The investigations into the delivery app-related most-favored-nation and tying cases are effectively in the final stage," adding, "For matters deemed to involve legal violations, we plan to send review reports sequentially and place them on the agenda of the full commission."
He added, "The final determination on illegality, corrective measures, and the level of sanctions will be finalized after the operators submit their opinions and the full commission deliberates."
The commission pointed out in particular that Baemin and Coupang Eats, even after saying on Apr. 4 that they would use the "consent decree" process, did not present specific voluntary corrective measures.
Under the consent decree system, when a business is investigated on suspicion of legal violations, the Fair Trade Commission can close the case without confirming illegality after collecting opinions from interested parties if the business proposes corrective measures for victim relief or improvement of transaction order.
Kim said, "Although the delivery app operators expressed their intention to apply for a consent decree, they did not submit concrete and effective win-win measures or corrective actions," explaining, "Accordingly, the consent decree process is not currently underway."
He said, "This review report includes the facts, legal violation assessments, corrective measures, and sanction plans," and predicted, "After the report is sent, the operators may again consider a consent decree plan."
Director General Kim emphasized, "Only if the operators present specific win-win measures commensurate with the level of sanctions and plans to restore transaction order can we consider the consent decree process."