We must pass the online platform act (hereinafter the platform act) in the December extra session of the National Assembly. We also need to introduce a cap on total delivery app fees to rein in abusive platform fees by delivery apps, and guarantee collective bargaining rights for businesses on platforms to resolve skewed power dynamics between contractors and subcontractors.
Korea Federation of Restaurants Chairman Kim Woo-seok, National Franchisee Association Co-chair Kim Jin-woo, and Association of Owners for Fair Platforms Chair Kim Jun-hyung, among others, at the "rally urging legislation of the platform act by the self-employed, small merchants, and civil society groups" held on the steps of the main building of the National Assembly in Yeouido, Seoul, on the 1st, said the government and the ruling party must no longer delay people's livelihood legislation—specifically the enactment of the platform act and the introduction of a cap on delivery app fees—under the pretext of tariff negotiations, urging passage of the online platform act within the year and adoption of a delivery app fee cap.
In a statement that day, they said, "Even if we work hard and sell, there is nothing left because Baemin, Coupang, and lodging apps take the fees. Small business owners do the work, and platforms take the money," noting, "Because of platform fees, 7 million self-employed people are being driven to the brink of subsistence, yet the government and the National Assembly are far too complacent."
They continued, "The ruling party has expressed its intent to enact a platform law, and the opposition has introduced a bill aimed at capping total delivery app fees at 15% or less, but in substantive discussions there has been no progress," demanding, "If the ruling and opposition parties fail to agree on the platform act in the December extra session, the Democratic Party should work with other opposition parties to pursue legislation by mobilizing every possible option, including designating it for the fast-track (expedited processing)."
A cap on delivery app fees is one of Lee Jae-myung's presidential campaign pledges. On the June 3 presidential election, Democratic Party presidential candidate Lee Jae-myung put forward as key state tasks the introduction of a delivery app fee cap and the establishment of a framework to ensure fairness in online platforms to protect small self-employed people. But of the 17 platform regulation-related bills introduced, not a single one has passed the National Assembly and they remain adrift in standing committees.
The platform act is a bill to prevent abuse of market dominance by platforms and includes items such as ▲ transparency in fee and advertising cost structures ▲ a ban on self-preferencing ▲ a ban on unilateral contract changes. In particular, it has drawn attention from the dining and delivery industries because it could provide the institutional foundation for a cap on delivery app fees. However, it is stuck amid political challenges including adjustments to the authority of the Fair Trade Commission, U.S. trade issues, pushback from the platform industry, and partisan strife.
Democratic Party lawmakers who attended the scene reiterated their position that they will see the platform act through. Min Byung-deok, a Democratic Party lawmaker and Chairperson of the Democratic Party's Euljiro Committee, said, "A few large platform corporations have monopolized the market and are effectively setting fees and advertising costs unilaterally. The damage has fallen squarely on small and micro merchants and consumers," adding, "We will make sure the platform act passes."
Kang Jun-hyun, a Democratic Party lawmaker and the ruling party secretary on the National Policy Committee, also said, "Building a fair platform ecosystem and easing fee burdens and strengthening bargaining power for onboarded businesses are reflected in the state agenda," adding, "There are many factors to consider, including the legislative method and timing, but we will forge agreement between the party and government and persuade the opposition to push the legislation."
The industry expects the platform act and the fee cap to become key livelihood bill flashpoints in the December extra session of the National Assembly. Because sectors such as delivery and lodging platforms oppose introducing a uniform fee cap, the gap between platforms and onboarded businesses will be hard to bridge.
An official in the platform industry said, "Fees are the area of fiercest competition among companies," adding, "The more the law imposes blanket regulations, the more exposure and advertising efficiency decline, increasing burdens on small business owners and potentially causing market distortions such as higher delivery charges. Those side effects cannot be ruled out."
An official on the National Policy Committee said, "With the desperate demands of the dining industry and the platform industry's backlash colliding head-on, handling of the platform act will be the key inflection point of this extra session," adding, "Depending on how the platform act is handled, the platform market's regulatory framework and the dining industry ecosystem are likely to be effectively reshaped."