The legislative direction of the delivery app fee cap, one of the 10 major pledges of the Lee Jae-myung government, appears to be divided.
The Democratic Party of Korea was pursuing a plan to include the delivery app fee cap in the Online Platform Transaction Fairness Act (hereinafter referred to as the Platform Act). However, the Fair Trade Commission proposed an alternative to regulate under the Food Service Industry Promotion Act, creating a new phase. This is due to concerns over trade conflicts with the United States.
However, the Ministry of Agriculture, Food and Rural Affairs, which oversees the Food Service Industry Promotion Act, opposes it, citing issues within the administrative system. They argue that including regulations for delivery app companies in a bill aimed at food companies contradicts the legal intent.
According to political circles and related industry sources on the 22nd, the National Policy Committee plans to hold a subcommittee meeting that afternoon to discuss whether to include the delivery app fee cap in the Platform Act. The key aspect of the delivery app fee cap is to limit the total fees, including commission fees, payment fees, and delivery costs, incurred by restaurant owners using delivery apps to a certain percentage of the order amount.
Currently, a potential cap of up to 15% of the order amount is being discussed. This figure is requested by self-employed individuals, including the 'Fair Platform Association' (hereinafter referred to as the Fair Platform Association). According to the Fair Platform Association, the current total commission fee for delivery apps amounts to 30-40% of the order value.
◇ Legislative direction causing differing views between ministries
Currently, the legislative direction for the delivery app fee cap is divided between whether to include it in the Platform Act or the Food Service Industry Promotion Act. Earlier, on the 7th, Democratic Party members of the National Policy Committee and Fair Trade Commission officials discussed legislative measures for introducing the fee cap at a government-party meeting. At that time, the Fair Trade Commission expressed concerns that applying the fee cap to all platforms could lead to trade issues with the United States, and that an increase in companies subject to the fee cap could result in excessive regulation. During this process, they reportedly suggested including it in the Food Service Industry Promotion Act rather than the Platform Act or the Fair Trade Act.
In response, the Ministry of Agriculture, Food and Rural Affairs opposes this, stating that the matter has not been previously agreed upon. The Food Service Industry Promotion Act is under the jurisdiction of the Ministry of Agriculture, Food and Rural Affairs. A ministry official noted, "The targets of legal application are entirely different in terms of legal intent and context," adding that "there was no prior coordination, and referring to such content as an alternative from the perspective of legal effectiveness makes no sense."
Currently, the Ministry of Agriculture, Food and Rural Affairs is only involved in related tasks, such as issuing public delivery app discount coupons. They lack the expertise to encompass the situation where they need to hear opinions from stakeholders (self-employed individuals, platform companies, delivery drivers, etc.) regarding the delivery app fee cap and conduct a fact-finding investigation.
Accordingly, the Democratic Party is reported to be considering a plan to introduce the delivery app fee cap in the Platform Act while establishing exceptions to exclude app market fees from Google and Apple to minimize concerns over trade friction. A source from the National Policy Committee stated, "It is better to address delivery and accommodation platforms together in the Platform Act," but added, "The parties will discuss how to resolve issues presented by the proposals that have come up today." Another source from the committee commented, "Since there are concerns that domestic corporations might face discrimination if exceptions are introduced, a quick agreement between the parties seems difficult."
◇ Delivery app industry watches legislative direction
The delivery and platform industry expects that the delivery app fee cap will eventually be implemented as it is part of the current government's 10 major pledges. However, they foresee difficulties in accelerating legislation due to disagreements between government ministries.
An industry source stated, "Since the Lee Jae-myung government's Presidential Committee on Policy Planning mentioned that they would reflect the easing of delivery app fee burdens in national agenda items, the fee cap will be legislated or introduced in some form." However, they added, "It is a priority to politically agree on which bill to include the fee cap."
Another industry source commented, "It seems unlikely that the delivery app fee cap will suddenly be included in the Food Service Industry Promotion Act. At the very least, it should be related to laws overseen by the Fair Trade Commission and other delivery app oversight ministries," and added, "Moreover, there hasn't been any agreement on the cap. It appears that a rapid legislative process will be challenging."
Park Sang-byeong, an invited professor at Inha University's Graduate School of Policy, stated, "The Lee Jae-myung government's 10 major pledges are policies that President Lee Jae-myung has been contemplating since he was the party leader. The government will push to implement them," while noting, "However, there appears to be some policy confusion at this time. Although they may not be able to accelerate, implementation will certainly occur."