Legislation for a "cap on delivery app fees" is gaining speed again in the National Assembly in the wake of the Coupang personal information leak. The aim is to regulate so that giant platforms cannot infringe on the rights and interests of small merchants. But some say a cap on delivery app fees could instead increase the burden on consumers.
◇ More than 10 bills to lower delivery app fees… legislation gains traction after the Coupang incident
According to the National Assembly on the 6th, there are more than 10 bills currently introduced related to a cap on delivery app fees. In general, they aim to lower the fees that self-employed people such as restaurants must pay to delivery apps.
Kim Nam-geun of the Democratic Party of Korea introduced the "act on fees for food delivery platform services" on the 9th of last month, 10 days after the Coupang personal information leak became known. The gist is to impose a penalty surcharge of up to 10% of annual sales if a delivery app charges unfair fees to small self-employed businesses. If calculating sales is difficult, a penalty surcharge of up to 5 billion won could be imposed.
Earlier, Lee Kang-il of the Democratic Party introduced the "act on fair transactions of delivery platforms." It limits the aggregates of brokerage, payment fees, and advertising costs to within 15% and sets upper and lower limits for delivery fees. Violations would be subject to a penalty surcharge of up to 3% of sales.
There is also a "partial amendment to the Monopoly Regulation and Fair Trade Act" introduced by Park Jeong-hoon of the People Power Party. It would ensure that the aggregates of delivery fees, brokerage, payment fees, and advertising costs do not exceed 15% of sales from orders.
The Democratic Party's Euljiro Committee also held a "discussion on legislative direction for a cap on delivery fees" on the 11th of last month. Opinions included, "The monopolistic status of delivery apps is weakening the bargaining power of the self-employed," and "It is inevitable to enforce by law a cap on platforms' aggregates of fees."
On this, industry sources said, "As the Coupang incident weakened platforms' footing, the political sphere is gaining momentum to legislate a fee cap."
◇ "Consumer burden may grow as free delivery is reduced"
Some argue that if legislation related to a cap on delivery app fees is enacted, it could negatively affect consumers. Lee Eun-hee, emeritus professor in the department of consumer studies at Inha University, said, "If a fee cap is legislated, delivery platforms are highly likely to shift the burden to consumers, such as by scaling back free delivery services to maintain their revenue structure." She added, "If consumer expense increases, delivery orders will decrease, and this will ultimately place a heavy burden not only on platforms but also on the self-employed."
There are similar survey results. According to a survey conducted by the Korea Consumer Education Support Center of 1,000 adult users of domestic delivery apps in their 20s to 50s (including 100 child-rearing households), 77.6% of respondents said that if a fee cap is implemented, delivery charges borne directly by consumers will increase. In addition, 58% of respondents said, "Free delivery may disappear if a fee cap is introduced."
The Consumer Sovereignty Citizens' Meeting said in a statement last month, "If regulations such as a fee cap are passed on to consumers, it could lead to negative outcomes such as higher delivery fees and shrinking market demand," adding, "We need to build a sustainable market structure centered on consumers."