[Alpha Biz= Kim Jisun] The Korea Fair Trade Commission (KFTC) has launched an on-site investigation into food delivery platform Baemin (short for “Baedal Minjok”) to determine whether its practices regarding “Most-Favored Nation” (MFN) clauses and the discontinuation of its flat-rate advertising product violate fair trade laws.
Industry sources confirmed on May 20 that the KFTC dispatched investigators to the headquarters of Woowa Brothers, the operator of Baemin, starting May 19 to secure internal documents and evidence related to the allegations.
The MFN clause in question allegedly required restaurant partners to list their menu prices on Baemin at the same or lower prices compared to other competing delivery platforms. Such a practice can restrict pricing freedom and potentially distort market competition.
Baemin and its competitor Coupang Eats had previously submitted an application for a consent decision process to the KFTC last month. A consent decision allows companies to voluntarily propose corrective measures in lieu of formal penalties, and the investigation can be closed without a definitive ruling on legal violations.
However, the consent process has drawn criticism from restaurant owners’ associations and lawmakers from the Democratic Party, who argue that it may provide undue leniency to major platform operators.
Another point of concern is Baemin's discontinuation of its flat-rate advertising service known as "Ultra Call," which previously allowed restaurants to display their listings prominently on the app for a fixed monthly fee of KRW 88,000 (approximately USD 65). The decision to eliminate this option raised questions about the transparency and fairness of Baemin's advertising model.
The KFTC's investigation will aim to determine whether these actions hinder fair market competition and harm small business operators. Further regulatory action will depend on the outcome of the investigation and potential consent agreement discussions.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
