Consumer Groups Opposing 'Baemin-Yogiyo' Merger... Submit Request for Disapproval to Fair Trade Commission

"Monopoly and Oligopoly Significantly Lower Prices, Service Quality, and Innovation Power... Consumers Bear the Brunt"

[Photo by Baedal Minjok website]

[Asia Economy Reporter Moon Chaeseok] The Consumer Citizens' Coalition (Sosimo) announced on the 28th that it has conveyed its opposition to the Fair Trade Commission regarding the corporate merger between Woowa Brothers (Baedal Minjok), the market leader in South Korea's delivery app market, and Delivery Hero (Yogiyo, Baedaltong), which hold the second and third largest market shares.

Sosimo stated in its opinion letter that it is "deeply concerned about consumer harm due to monopoly" resulting from the merger of the two companies. Sosimo explained that the Fair Trade Commission officially requested consumer opinions on the merger between the two companies with dominant market positions, leading to the submission of the opinion letter.

The Fair Trade Commission is currently reviewing the corporate merger report submitted last December between the two companies.

Sosimo said that since the two companies have already formed a monopoly in the delivery app market, concerns about monopoly will persist even if they operate as separate entities after the merger.

They cited the change in market share following Hyundai Motor Company's acquisition of Kia Motors as an example. According to Sosimo, Hyundai's market share was 56% before acquiring Kia, but it rose to 67% immediately after the acquisition in 1999. Since then, the market share has never fallen below 70% from 2006 onward.

Sosimo argued that the existing monopolistic position was rather solidified by the corporate merger, resulting in monopoly damages such as increased vehicle prices, significantly shorter warranty periods compared to export vehicles, and neglect of research and development (R&D).

Data provided by the Citizens' Coalition for Consumer Safety

Earlier, Sosimo conducted a survey last month in Seoul, Gyeonggi Province, and six metropolitan cities nationwide, which showed that 86.4% of respondents opposed the corporate merger.

Sosimo interpreted this as the majority of consumers predicting that after the delivery app companies merge, the merged entity would effectively hold nearly 100% market share, reorganizing the market into a stronger monopoly, thereby reducing consumer benefits such as price competition and service improvements.

According to mobile business platform IGA Works, if the corporate merger is approved, Delivery Hero's market share in the delivery app market is expected to reach 98.7%.

A Sosimo official said, "If this corporate merger further solidifies the monopoly market, the driving force for competition in price, service quality, and technological innovation will significantly decline, and the damage will ultimately be passed on to consumers," adding, "The Fair Trade Commission should strengthen legal regulations on monopolies in reviewing this merger and urge platform companies to fulfill their social responsibilities and obligations."

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