SEOUL, May 25 (Korea Bizwire) — Kakao Mobility Corp. and T Map Mobility Co. will be restricted from expanding in the call-based chauffeur driver service market, while other large companies will be prevented from entering the market, the Korea Commission for Corporate Partnership said Tuesday.
The commission, a private body responsible for shared growth among conglomerates and smaller businesses, designated the call-based substitute driver service as an SME-suitable business area, advising large companies to stay away from the market.
It asked both companies, which already have a presence in the market, to refrain from staging cash-based promotional activities.
Other recommendations presented by the commission include joint efforts between large companies and SMEs to improve the welfare and treatment of substitute drivers, and the establishment of a consultative body to promote the observation of the agreement.
Large companies are not legally required to follow this decision since it is only a recommendation, but in actual practice, all companies tend to comply since the recommendations are based on agreements among businesses.
The SME-suitable business designation system was introduced in 2011 to protect the interests of SMEs and small merchants from large businesses.
Once designated as SME-suitable business area, large companies are recommended not to expand or enter the market for three years.
The three-year period can be extended for an extra three years, thereby protecting SMEs for up to six years.
J. S. Shin (email@example.com)