Commission Reform Hits Snag... Baemin Faces High-Intensity Investigation Scheduled

Impact Inevitable Due to Fair Trade Commission Intervention... Examining Market Dominance and Information Monopoly
Official Apology and Additional Reorganization Under Discussion

[Asia Economy Reporters Kim Cheol-hyun and Joo Sang-don] Woowa Brothers faced consecutive obstacles after attempting to revise the commission fees of their food delivery application 'Baedal Minjok (Baemin)' this month. Despite the CEO stepping back with an apology and promising improvements amid strong opposition from many small business owners and intense political pressure, the Fair Trade Commission (FTC), which is conducting a corporate merger review with Delivery Hero, announced plans for a rigorous investigation, making damage inevitable.

On the 7th, Kim Jae-shin, Secretary General of the FTC, commented on the recent Baemin commission fee controversy, stating, "During the review of the corporate merger and the assessment of monopoly status, the ability to arbitrarily change the commission fee structure is a clear example that reflects the market dominance of the company (Baemin), regardless of the benefits or disadvantages to small business owners." This indicates that the current commission fee revision controversy demonstrates Baemin's overwhelming market dominance. Kim added, "During the corporate merger review, it is impossible not to examine Baemin's commission fee revision and its resulting market dominance," and explained, "In addition to the existing inspection items, we will focus on investigating what impact the revised commission fee structure will have on franchise stores and whether there is a risk of burden being passed on to consumers."

The FTC also plans to examine issues related to information monopoly alongside the commission fee revision. Kim stated, "It is understood that various information about consumers and franchise stores is collected, analyzed, and utilized during the delivery app service process," and added, "We plan to thoroughly investigate, even employing on-site inspection methods during the corporate merger review, whether this information is collected legitimately from franchise stores, whether the collected and analyzed information is appropriately provided only to the extent necessary for the franchise stores, and whether it is used for other purposes."

As the fallout from the commission fee revision extends to the FTC's corporate merger approval review, Woowa Brothers find themselves in a difficult position. Emphasizing the necessity of the commission fee revision prematurely could adversely affect the crucial corporate merger with Delivery Hero. Baemin explained that the revision plan was announced in early December last year and had been prepared over a long period before the merger decision, so it is a separate issue. They also emphasized that the revision plan aims to improve unfair trading environments, such as the so-called 'flag planting,' where some businesses monopolize advertisement exposure and orders.

However, industry insiders view the FTC's strong remarks following the CEO's official apology and improvement plan as evidence that the current situation is unfavorable to Baemin. It is said that overcoming the difficulties may not be easy without a significant overhaul that restores the revision implemented this month to its original state.

The market's close attention to Woowa Brothers' efforts to devise improvement measures is also expected to add pressure. Kim Beom-jun, CEO of Woowa Brothers, stated, "We will seek ways to supplement various aspects, including protection measures for those facing increased cost burdens." An industry official explained, "Since data must be accumulated to present improvement plans, Baemin will need to determine how much time it will take to gather meaningful data and set a direction."

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