[DiaryPoint = Reporter Eom Ju-yong] South Korea’s Fair Trade Commission said on the 9th that it had ordered Woowa Brothers, the operator of Baemin, and Coupang to take corrective measures, and decided to impose provisional fines of ₩331.1 billion and ₩300.8 billion, respectively. The combined ₩631.9 billion is the largest penalty ever in a case involving food delivery apps.
The central issue is a “most-favored treatment” requirement. It prevents restaurants from offering more favorable menu prices, minimum order amounts or discounts on one app than on another. The commission found that both companies tied these terms to restaurants’ status as participants in free-delivery membership benefits.
An economic analysis by the commission found that Coupang Eats’ most-favored treatment requirement pushed up menu prices on Baemin. For a ₩25,000 order, the estimated increase was ₩1,650 for Baemin’s restaurant-managed delivery and ₩350 for its platform-delivery service. These are estimates based on the analysis and may differ from actual price increases at individual restaurants.
When comparing prices, check delivery fees and who bears the cost of discounts, not just menu prices. Even when menu prices are the same across apps, delivery fees, coupon conditions and minimum order amounts can change the total. The most useful comparison is the final amount for the same meal just before placing an order.
Baemin also faces measures over restaurant-delivery listings and fees
The action covered more than the most-favored treatment requirements. The commission found that Baemin reduced the visibility of “restaurant-managed delivery,” which carries lower fees, and steered restaurants toward its own delivery service. It ordered the company to stop the practices and recalculate fees for restaurant-managed delivery. Misleading advertising about estimated delivery times was also cited.
Coupang was ordered to revise contract terms that included restaurant-funded discounts when calculating commissions. The commission objected to a clause that charged commission on the order amount without deducting discounts given to consumers. Both companies will now go through the corrective-order implementation and fine procedures.
The allegation that Coupang bundled Coupang Eats benefits with its Wow membership was separated from the fine decision. The commission will review the matter again because its investigators and Coupang disagreed over which products counted as the main and secondary offerings. This is a separate process from the provisional fines set over the most-favored treatment requirements and other conduct.
Hwang Won-cheol, a standing commissioner at the Fair Trade Commission, said, “Coupang’s most-favored treatment requirement prompted Baemin to respond, and also appears to have accelerated its practice of forcing restaurants to switch to its own delivery service.” Coupang said it would review the final written decision and present its position through legal procedures.