The Fair Trade Commission recommended corrective action to Coupang Eats, which charges fees based on the price before discounts. Because fees are compensation for services that broker a transaction, the FTC believes the basis should be the actual transaction amount, which is the price after discounts. However, Coupang Eats did not accept this view, so the FTC's action remained a corrective "recommendation."
The FTC reviewed not only Coupang Eats but also Baemin's terms of service and uncovered 10 types of unfair clauses. The two companies accepted the FTC's findings and decided to revise their terms in the near future.
On the 13th, the FTC reviewed the terms of service for merchants on Baemin and Coupang Eats and ordered corrections for 10 types of unfair clauses, including the above. The two platforms plan to implement the changes soon after notifying merchants of the revised terms.
Regarding the clause setting Coupang Eats' fee-charging basis, the FTC only recommended correction within 60 days. That is because Coupang Eats argued it was not illegal.
Coupang Eats stipulates that the basis for charging brokerage fees and payment fees to merchants is the list price before discounts, not the amount actually paid by consumers. As a result, when merchants issue coupons at their own expense to run discount promotions, they pay Coupang Eats fees on the discount amount—sales that did not actually occur—in addition to the expense loss from the discount. It is said that Coupang Eats receives hundreds of billions of won annually through this method.
The FTC determined that brokerage fees are compensation for services that broker a transaction, so they should be charged based on the actual transaction amount of the item brokered. It also viewed that payment fees, too, should be charged based on the amount actually paid to reflect the substance of the transaction.
The FTC's investigation found that only Coupang Eats charged fees based on the price before discounts, while most delivery app operators, including Baemin and Yogiyo, used the amount after discounts as the basis. In the shopping mall (Coupang) segment, Coupang, unlike Coupang Eats, charges fees based on the amount after discounts.
Kim Moon-sik, Director General of the FTC's Market Surveillance Bureau, said, "Coupang Eats argued that its (own) fee-charging basis does not violate the Terms and Conditions Act," but added, "It is difficult to publicly disclose the operator's grounds for defense." A Coupang Eats official said, "We sufficiently notified merchants of the method for calculating brokerage fees," and added, "We will faithfully explain in accordance with future FTC procedures."
The FTC's corrective measures this time also included a clause that unilaterally restricts store exposure distances. The FTC viewed that when normal delivery is difficult due to bad weather or surges in orders, temporarily adjusting exposure distances by delivery app operators can be essential. However, what the FTC took issue with was the low predictability. If a delivery app adjusts exposure distances, it should enable merchants to predict how much they will be restricted.
However, Baemin and Coupang Eats' terms do not set notification procedures when restricting exposure distances. Baemin does notify merchants via the order-receipt channel that exposure distances are being restricted, but does not disclose the reasons or the distances. Coupang Eats does not notify at all regarding exposure distance restrictions. Following the FTC's findings, the two platforms decided to specifically refine the reasons for restricting exposure distances and to notify merchants when such measures could significantly affect their interests.
Baemin had stipulated in its terms that it could change or determine exposure distances even when merchants deliver on their own, but it decided to delete this clause. The FTC said this was unfair because store deliveries are the responsibility of the merchant.
The FTC also told Baemin and Coupang Eats to spell out the reasons for deferring settlement of payments. When settlement is deferred, it extended the period for merchants to explain and strengthened guarantees for the objection process. It also deleted a clause allowing delivery apps to hold part of merchants' sales proceeds upon contract termination, and required that if the settlement process is delayed due to reasons attributable to the app, the obligation to pay delay interest must be specified. Under the Commercial Act, if there is no separate agreement between businesses, the delay interest rate is 6% per year.
In addition, if the terms are changed to the detriment of customers, individual notification must be given with sufficient lead time. For clauses that uniformly exempt or reduce the delivery app's liability, they will be limited to cases where the operator has intent or negligence. For rules allowing a delivery app to unilaterally delete written reviews, procedural rights such as merchants' right to object will be guaranteed.
Kim said, "Since May, we have formed and been operating a task force (TF) for handling delivery app cases, and today we announced, on a priority basis, the items that violate the Terms and Conditions Act," adding, "We will soon conclude investigations into major cases involving other legal violations, such as demands for most-favored treatment and tying."
He added, "Due to demands for most-favored treatment, etc., on the 4th Baemin and Coupang Eats expressed their intention to seek consent decisions, but they have not submitted specific and sufficient corrective measures (to date)," and, "If the two companies still intend to apply for consent decisions, they should clearly present win-win plans proportionate to the level of sanctions and aimed at restoring transaction order."