[Sejong=Edaily Reporter Ha Sang-yeul ] Baemin and Coupang Eats have been ordered to pay a total of 631.9 billion won in fines for restricting competition by requiring partner restaurants to offer prices and discount terms that were no less favorable than those offered by other delivery apps. This is the largest fine ever imposed on a food delivery app. The Fair Trade Commission determined that the two companies’ actions infringed on restaurants’ pricing autonomy and increased the burden on consumers.

◇Forced Pricing That Actually Raised Food Costs

On the 9th, the Fair Trade Commission announced its decision to provisionally impose fines of 331.1 billion won and 300.8 billion won, respectively, on Woowa Brothers, the operator of Baemin, and Coupang, the operator of Coupang Eats, for violations of the Fair Trade Act and the Labeling and Advertising Act.

For Baemin, the fines were broken down as follows: △160.2 billion won for demanding most-favored-nation treatment, △155.4 billion won for forcing restaurants to switch to in-house delivery, and △15.4 billion won for deceptive advertising regarding estimated delivery times. Coupang was fined 300.8 billion won solely for the single incident of demanding most-favored-nation treatment. A separate corrective order was also issued regarding Coupang’s unfair commission terms and conditions.

The crux of the matter is the “most-favored-nation treatment” demanded by the market’s top two players from participating restaurants. This refers to the practice of delivery apps requiring merchants to set product prices or transaction terms on their own apps to be equal to or more favorable than those on competing apps. Last year, Baemin held a 58.45% market share based on order value, while Coupang Eats held 34.44%, for a combined total of 92.89%.

As a late entrant, Coupang charged a higher commission rate (9.8% at the time) than Baemin. When restaurants set higher food prices on Coupang Eats as a result, Coupang required them—from July 2023 through January of this year—to align six conditions, including food prices and minimum order amounts, so that they were no less favorable than those on competing apps. Restaurants that did not comply were excluded from the “Wow Store” program, which offers free delivery. Coupang even operated a system where it directly adjusted food prices and other factors by eliciting unintentional consent from restaurant owners.

Baemin, sensing a crisis as Coupang closed in on its market share, resorted to the same tactics. In May 2024, it launched the subscription service “Baemin Club,” and in August of that year, it raised its in-house delivery commission rate from 6.8% to 9.8%—matching Coupang’s rate. At the same time, until October of last year, it provided free delivery benefits through Baemin Club only to restaurants that set menu prices and minimum order amounts on terms no less favorable than those of Coupang Eats.

The Fair Trade Commission (FTC) determined that the two companies, by forcing most-favored-nation treatment, caused effects similar to collusion—such as a weakening of commission competition and increases in food prices and minimum order amounts. Analysts note that this also made it difficult for public and small-to-medium-sized delivery apps with lower commissions to compete on price.

In fact, according to the FTC’s economic analysis, Baemin’s menu prices rose by 350 won for in-house delivery and 1,650 won for restaurant-based delivery—based on an order amount of 25,000 won—due to Coupang Eats’ MFN demands. The daily average sales of restaurants excluded from membership benefits were found to have decreased by approximately 60% on Coupang Eats and approximately 70% on Baemin.

Hwang Won-cheol, a standing commissioner of the Fair Trade Commission, explained, “As the two dominant players simultaneously demanded most-favored-nation treatment, their commission rates and transaction terms became similarly high,” noting that this resulted in a restrictive effect on competition similar to collusion.

◇ Baemin Forced Restaurants to Switch to Its Delivery Service and Manipulated Delivery Times

Baemin was also found to have artificially curtailed “restaurant-based delivery”—the method preferred by restaurants—in order to expand its own highly profitable delivery service, “Baemin Delivery” (in-house delivery). In restaurant-based delivery, Baemin merely acts as an intermediary for orders, while the restaurant or an external delivery agency handles the delivery, resulting in a relatively lower commission burden.

Baemin reduced the visibility of “Restaurant Delivery” on its app interface and discontinued “Ultra Call,” a flat-rate service. In March of last year, it consolidated restaurant listings to prevent restaurants from setting minimum order amounts and menu prices for “Restaurant Delivery” lower than those for “Baemin Delivery.”

During this process, deceptive advertising that misled consumers was also identified. While the actual average delivery time for “Store Delivery” (31.5 minutes) was 1.4 minutes faster than Baemin’s “Budget Delivery” (32.9 minutes), the app interface displayed the estimated delivery time for “Store Delivery” (44.7 minutes) as taking approximately 13 minutes longer than “Budget Delivery” (31.7 minutes).

The Fair Trade Commission ordered Baemin to voluntarily reassess its “Store Delivery” commission rates. It also issued a cease-and-desist order regarding the forced switch to in-house delivery and the deceptive advertising of estimated delivery times.

It ordered Coupang Eats to revise its terms and conditions, which charged commissions that included discounts borne by the restaurants themselves. The investigation found that from 2023 through the first half of last year, Coupang Eats collected over 32.4 billion won in commission fees from the discounts offered by restaurants.

Previously, in June, the Fair Trade Commission rejected applications for “consent decrees” from Baemin and Coupang and proceeded with a full review of the case. A consent decree is a system whereby a case is closed without determining whether a violation occurred, provided the company proposes voluntary corrective measures. Both companies proposed mutual growth support plans worth 300 billion won and 60 billion won, respectively, but these were not accepted.

Meanwhile, the FTC decided to re-examine allegations of tie-in sales involving Coupang’s online shopping and Coupang Eats services. An FTC examiner viewed online shopping linked to the Wow Membership as the primary product, but Coupang argued that online shopping unrelated to the membership should serve as the benchmark. The FTC determined that, due to the difference in legal interpretation between the two sides, Coupang’s right to defense had not been sufficiently guaranteed.