Restaurant owners claim that Baedal Minjok, commonly known as Baemin, pressured them to keep prices on its platform lower than or equal to those on rival apps. (Image courtesy of Yonhap)
SEOUL, Sept. 30 (Korea Bizwire) – The Korea Fair Trade Commission has launched an investigation into Baedal Minjok, the country’s largest food delivery app, over allegations that it forced restaurants to offer it the most favorable pricing terms.
Restaurant owners claim that Baedal Minjok, commonly known as Baemin, pressured them to keep prices on its platform lower than or equal to those on rival apps.
According to these allegations, if restaurant owners attempted to set higher prices or minimum order amounts on Baemin compared to other platforms, the company would limit their visibility on the app.
The antitrust regulator is also examining claims that Baemin effectively restricted restaurants from implementing a dual pricing system, where delivery prices differ from in-store prices.
On September 29, the Fair Trade Commission stated that it would impose strict sanctions if unfair practices were uncovered.
In response, Baemin issued a statement defending its practices. The company argued that a competitor, Coupang Eats, had initiated the “most favored nation” pricing requirement in August of last year. Baemin claimed it adopted similar measures in response, noting that authorities had not taken action against its rival. The company also denied that its actions regarding dual pricing amounted to coercion.
As the controversy over delivery fees escalates into accusations of unfair practices by delivery apps, the National Assembly is preparing to scrutinize the issue during next month’s parliamentary audit.
The Assembly’s Trade, Industry and Energy Committee plans to summon Pieter-Jan Vandepitte, CEO of Woowa Brothers (Baemin’s parent company), along with executives from Coupang and Yogiyo, to question them about fee structures and alleged unfair practices.
Small business owners and self-employed individuals argue that the “most favored nation” clauses demanded by major delivery apps, including Baemin, are the primary cause of rising delivery fees.
They contend that without the ability to adjust prices on individual platforms, restaurant owners are left with no recourse when apps increase their fees.
The Fair Trade Commission is evaluating whether these “most favored nation” clauses hinder market competition. In July, the regulator conducted on-site investigations of the three major delivery apps (Baemin, Coupang Eats, and Yogiyo).
It now plans to thoroughly examine allegations of Fair Trade Act violations by Baemin, as reported by the Korea Franchise Industry Association on September 27.
The association accuses Baemin, which holds approximately 60% of the delivery market share, of leveraging its dominant position to engage in three major unfair practices: price abuse, self-preferencing, and demanding most favored nation status.
The regulator is also scrutinizing Baemin’s free delivery membership program, Baemin Club, introduced in May. While consumers enjoy free delivery, restaurant owners bear a 9.8% brokerage fee and delivery costs of around 3,000 won.
Baemin raised its brokerage fee from 6.8% to 9.8% last month, three months after launching the program.
Additionally, the Fair Trade Commission is reviewing Baemin’s “Same Price Certification” program, launched in July, which awards a badge to restaurants that maintain identical prices for delivery and in-store orders.
Restaurant owners view this as an attempt to control price differentiation between online and offline channels in response to fee increases.
Ashley Song (ashley@koreabizwire.com)
