Establishment of Self-Regulation for Delivery Apps... 'Exposure Order' and 'Commission Method' Must Be Included in Terms and Conditions

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Self-regulation measures have been established for delivery app platforms. From now on, the contracts of businesses joining delivery platforms such as ‘Baedal Minjok’ must include criteria for ‘search exposure order determination’ and ‘commission application methods’.

On the 6th, the ‘Delivery Platform Self-Regulation Measures Presentation’ was held at the Korea Federation of SMEs in Seoul, marking the first self-regulation case aimed at improving transaction practices between platform operators and tenant businesses. The presentation was attended by delivery platform operators, related business organizations, small and medium enterprises and small business groups, members of the platform self-regulation committee Gap-Eul Subcommittee, and government officials including Han Ki-jung, Chairman of the Fair Trade Commission.

An agreement was reached on the mandatory items to be included in delivery platform tenancy contracts (agreements). Through self-regulation, platforms and tenant businesses agreed to include essential items in tenancy contracts such as contract duration, reasons and procedures for contract changes, renewals, and terminations, commission and advertising fee application methods, payment settlement cycles, and criteria for determining search exposure order.

Additionally, procedural provisions were established requiring delivery platform operators to notify in advance, within a certain period, the reasons and details when terminating or changing tenancy contracts or restricting or suspending services provided to users. Furthermore, the tenancy contracts will include provisions requiring operators to cooperate in resolving disputes arising from food delivery cancellations and refunds, and to establish standards and policies regarding malicious reviews within the delivery app, reflecting the characteristics of the delivery platform industry.

A ‘Delivery Platform Self-Dispute Mediation Council’ will also be established to promptly resolve disputes between platforms and tenant businesses. Specific details regarding the establishment, composition, operation, and mediation procedures of the council will be prepared through consultations among delivery platform operators by the end of June 2023, followed by a pilot operation until the end of September 2023 before full-scale implementation. Moreover, delivery platform operators will promptly respond to user complaints by providing results and reasons within three business days from the date of complaint receipt, barring unavoidable circumstances.

In addition, platforms will implement various measures to reduce the burden on users. Baedal Minjok and Coupang Eats had planned to end their policy of free packaging order service fees in March this year after extending it for three months since last December, but they have decided to extend the policy for one year. Yogiyo will shorten its payment settlement cycle. Baedal Minjok, Yogiyo, and Coupang Eats all plan to introduce review policies to establish standards for responding to malicious reviews within their delivery apps. Ttaenggyeoyo, which applies a low commission rate of 2%, will continue the same commission policy throughout the year.

The Gap-Eul Subcommittee of the self-regulation organization plans to continuously monitor the implementation status of the agreed self-regulation measures. The subcommittee will issue a first warning if there is any non-compliance without reasonable grounds, and if non-compliance continues or recurs without reasonable justification, the details of the non-compliance will be publicly disclosed.

Han Ki-jung, Chairman of the Fair Trade Commission, said, “Six months after discussions between platform operators and tenant businesses began in earnest, the first results of self-regulation discussions have been achieved,” and added, “Before the government uniformly introduces institutional measures, this self-regulation reflects the intention to establish effective measures tailored to each market situation through communication and consultation among stakeholders.” He continued, “In addition, proactive win-win efforts such as extending the free packaging fee policy and shortening the payment settlement cycle in delivery app platforms stand out.”

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