Fair Trade Commission: "Baemin Commission Restructuring as a Case to Gauge 'Market Dominance'"... Emerging as a Variable in Corporate Merger Review

[Photo by Baedal Minjok website]

[Sejong=Asia Economy Reporter Joo Sang-don] The revision of the commission fee system by 'Baedal Minjok (Baemin)', the No.1 domestic delivery app, is expected to become a major variable in the approval review of the corporate merger with 'Yogiyo'. The Fair Trade Commission (FTC) views Baemin's unilateral revision of the commission fee system as a "gauge" for assessing market dominance.

On the 7th, Kim Jae-shin, Secretary General of the FTC, said in a phone interview with Asia Economy, "During the review of whether the merger constitutes a monopoly, the fact that the commission fee system can be changed at will is a clear example that can gauge the market dominance of the company (Baemin), regardless of the pros and cons for small business owners." This is an example that indirectly shows how strong Baemin's market dominance is.

Kim said, "While reviewing the merger, Baemin revised the commission fees, making it impossible not to consider the resulting market dominance," adding, "In addition to the existing inspection items, we will focus on investigating what results the revised commission fee system will cause for franchise stores and whether there is a risk of burden being passed on to consumers."

The FTC also plans to closely examine the issue of information monopoly along with Baemin's commission fee revision. Kim explained, "We understand that various information of consumers and franchise stores is collected, analyzed, and utilized during the delivery app service process," and said, "We plan to thoroughly investigate, even using on-site inspection methods during the Baemin-Yogiyo merger review, whether this information is collected legitimately from franchise stores, whether the collected and analyzed information is appropriately provided only to the necessary extent to franchise stores, and whether it is used for other purposes."

Earlier, Baemin changed its existing flat-rate commission fee system (88,000 KRW per month) to a percentage-based system (5.8% of the sales from completed orders) starting this month. This has drawn criticism from the political sphere as well. On the 5th, the Democratic Party of Korea and the Together Citizens' Party stated, "We will devise ways to curb the tyranny of monopolistic delivery apps and create a rational competitive system." Gyeonggi Province Governor Lee Jae-myung criticized on his SNS, "Is it acceptable to gain unfair profits by harming the powerless majority just because you have some power in an already difficult situation?"

Eventually, Woowa Brothers, the operator of Baemin, issued an apology on the afternoon of the 6th under the name of CEO Kim Beom-jun. CEO Kim said, "We introduced the new fee system to reduce the harmful practice of 'flag planting,' where some businesses monopolize ad exposure and orders, but we failed to fully consider the changing difficulties faced by self-employed business owners," adding, "Woowa Brothers sincerely apologizes for the emergence of businesses whose cost burden suddenly increased." He continued, "Comparing the data for five days after the new system was introduced with the same period the previous week, the ratio of business owners whose cost burden increased and those whose burden decreased under the open service fee plan is almost the same," and added, "We will also consider transparently disclosing the data as it accumulates in the future."

Meanwhile, on December 30 last year, 'Baedal Minjok' and 'Yogiyo' submitted their corporate merger notification to the FTC. The merger review period is set at 120 days (30 days + 90 days). However, the time taken for additional data requests and supplements during this period is not included in the statutory review period, so the review period can typically take more than a year.

This content was produced with the assistance of AI translation services.