Kwon Chil-seung welcomes ‘631.9 billion won’ in fines for Baemin and Coupang, says corrective measures must be followed through to the end

[Financial News] Kwon Chil-seung, the Democratic Party of Korea’s policy committee chair, welcomed the Korea Fair Trade Commission’s decision to impose fines totaling 631.9 billion won on Woowa Brothers and Coupang, which operate the two major delivery apps Baedal Minjok and Coupang Eats, respectively. He also said that implementation of other corrective measures must be tracked through to the end.
At a floor leadership strategy meeting held at the National Assembly that day, Kwon said, “Yesterday (the 9th), the KFTC announced fines of 631.9 billion won for Baemin and Coupang Eats,” adding, “The KFTC’s stern response is welcome.”
The KFTC had determined that Baemin and Coupang abused their dominant market positions by unfairly demanding most-favored treatment and other conditions. It provisionally imposed fines of 331.1 billion won on Baemin and 300.8 billion won on Coupang. The combined amount is the largest-ever fine imposed on delivery apps.
Kwon pointed out, “The two companies required restaurants on their platforms to offer terms and discounts equal to or more favorable than those on other apps, and excluded them from membership programs if they did not comply.” He added, “The sales of businesses excluded in this way fell by about 60 to 70 percent. These are demands that small restaurants cannot refuse.”
He continued, “What right does a platform have to control prices?” He argued, “By blocking opportunities to sell at lower prices and distorting consumer choice, they have even increased the burden of food costs.”
He also criticized the companies, saying, “Baemin’s store delivery was faster than Baemin’s own delivery, but the app instead showed its own delivery as faster. What’s more, Coupang charged a commission even on discounts that store owners funded themselves. This infringed both small business owners’ right to run their businesses and consumers’ ability to make rational choices.”
Kwon stressed, “This sanction must lead to change that eases the burden on small businesses and allows consumers to enjoy the benefits of fair competition. We must ensure that corrective measures, including setting fees and revising unfair terms and conditions, are properly implemented on the ground, all the way through.”
He added, “The burden of future sanctions must not be passed on to platform vendors, either. The DPK will also continue to support improvements to the order governing platform transactions so that these unfair practices do not recur.”
[email protected] Kim Hyeong-gu Reporter