South Korea's antitrust watchdog rejected settlement proposals from food delivery platforms Baemin and Coupang Eats, potentially exposing them to significant fines for alleged unfair business practices. The companies offered a combined $260 million in merchant support funds, which regulators deemed insufficient.
The rejection of settlement bids by South Korea's antitrust watchdog signals a tougher stance against dominant food delivery platforms, potentially leading to substantial fines and forcing significant changes in market practices that affect thousands of restaurants and consumers.
South Korea's antitrust watchdog has officially rejected voluntary settlement bids from the country's two largest food delivery applications, Baedal Minjok (Baemin) and Coupang Eats, potentially exposing them to significant financial penalties. The Korea Fair Trade Commission dismissed the "consent decree" applications submitted by Woowa Brothers Corp., the operator of Baemin, and Coupang Eats, which would have allowed the companies to resolve allegations of unfair business practices without admitting liability.
The companies had offered a combined 360 billion won ($260 million) in merchant support funds as part of their settlement proposals. However, regulators deemed these voluntary remedies insufficient to restore fair market competition or provide adequate relief to affected restaurant owners. Following the rejection, Baemin faces potential fines of up to 510 billion won, while Coupang Eats faces up to 250 billion won.
The investigation targets allegations that the platforms coerced partner restaurants into disadvantageous contracts, including demands to maintain prices and discounts equal to or lower than those offered on competing apps. Restaurants that refused faced penalties such as exclusion from premium membership programs. Beyond price coercion, Baemin is also accused of manipulating search rankings to favor its proprietary, higher-profit "Baemin Delivery" service over the merchant-led "Store Delivery" option and allegedly manipulating estimated delivery times.
Coupang Eats is under scrutiny for potentially bundling its food delivery services with its broader e-commerce ecosystem, possibly forcing consumers to use Coupang Eats through integrated app interfaces, membership registrations, and its "Wow Membership" program.