The regulatory environment surrounding the delivery platform industry is changing rapidly. Following the Korea Fair Trade Commission's review of large penalty surcharges and its push to introduce a joint bargaining right for onboarded merchants, a recent court ruling recognizing delivery riders as workers has added to concerns across the industry about growing management uncertainty. Although each issue is separate, some say the overall business model needs a thorough reassessment amid a strengthening trend of platform regulation.
According to the industry on the 14th, the Korea Fair Trade Commission (FTC) reported a "plan to overhaul the system to strengthen the bargaining power of the weak" at a Cabinet meeting on the 30th of last month. It will push to revise the Fair Trade Act so that even if small businesses and microbusiness owners jointly negotiate with platforms on prices, fees, and transaction terms, it will not be deemed collusion if certain conditions are met.
If the amendment takes effect, associations of small business owners on delivery apps are expected to be able to jointly negotiate major transaction terms such as fees, advertising costs, and exposure methods. On the other hand, the delivery app industry raised concerns that if negotiation channels are dispersed among many groups, the burden of platform operations could grow.
In addition, the Korea Fair Trade Commission (FTC) plans to begin deliberations related to penalty surcharges over demands for most-favored treatment by Baemin and Coupang Eats. Baemin and Coupang Eats currently face allegations including demands for most-favored treatment, preferential treatment for in-house delivery, and tying. With the companies' requests for a consent decision dismissed, procedures to impose penalty surcharges have entered full swing. In the industry, if all violations are recognized, there is talk that the two companies could face a combined penalty surcharge in the hundreds of billions of won.
The delivery platform industry is more concerned not about the penalty surcharge itself, but about the possibility that regulatory standards for overall platform transaction practices could be tightened going forward. An industry official said, "It would be fine if it corrects what is wrong in the market, but we are concerned that regulation could lead to an overall market contraction."
A recent appellate ruling by the Seoul High Court recognizing delivery riders as workers under the Labor Standards Act has also emerged as another variable. On the 8th, the Civil Division 38-1 of the Seoul High Court (Presiding Judge Lee Ji-young) partially ruled in favor of the plaintiff in a lawsuit filed by a Rider Union-affiliated delivery rider surnamed Jeon against a small and midsize delivery agency company, seeking to invalidate dismissal and to claim wages.
However, the industry said it is difficult to broadly interpret this ruling to apply to all delivery platforms, as it is a judgment on the operating method of a particular delivery agency. The case involved individual circumstances in which substantive direction and supervision were exercised, including control over working hours, dispatching, vacations, and dress codes.
An industry official said, "This ruling did not generally recognize riders as workers, but is a judgment on the contractual relationship between a specific company and a rider," adding, "It is hard to view large platforms on the same line because they are not structured to control working hours or manage clock-ins and clock-outs."
That said, because the court viewed indirect controls—such as dispatch management through algorithms, penalties, and manager directives—as factors in determining worker status, there is concern that similar lawsuits in the future may subject overall operating practices of platforms and delivery agencies to stricter scrutiny.
Lee Jong-woo, a professor in the Department of Distribution and Marketing at Namseoul University, said, "This ruling is an individual case, but if similar cases accumulate going forward, the platform industry will need to prepare for it."
◇ "Regulatory approach should reflect industry-specific characteristics"
In addition, as the National Assembly continues to discuss introducing a cap on delivery app fees, pressure surrounding platform regulation is mounting. The delivery app fee cap bill aims to legally limit the structure in which platforms determine intermediary fees and advertising and delivery charges, given the increased reliance on delivery apps and the growing burden on microbusiness owners and small business owners. Multiple bills to cap fees are currently pending in the National Assembly. President Lee Jae-myung also pledged during the presidential campaign to introduce a delivery app fee cap. An industry official said, "Since there are many cases overseas where fee caps were implemented and then withdrawn, we need to examine the possibility that such measures could dampen market functions."
Experts say the recent wave of regulatory moves requires an approach that reflects industry characteristics. Professor Lee said, "Platform businesses operate on a structure where sellers, consumers, and platforms transact autonomously, and if you start to control this legally, the core platform function could be weakened," adding, "While we agree with the direction of protecting workers and small business owners, we can reduce side effects by designing systems step by step while fully considering the characteristics of each industry."