SMEs Ministry to Investigate Platform Cost Burdens... Institutionalizing the 'Platform Win-Win Growth Index Evaluation'

Meeting for Mutual Growth with Small Business Owners on Online Platforms
"If Unfair Practices Occur, We Will Take Action in Cooperation with the Fair Trade Commission"

The Ministry of SMEs and Startups will investigate the cost burden of intermediary fees, advertising expenses, delivery charges, and other costs imposed on businesses operating on online platforms. Additionally, the ministry plans to quantitatively assess the level of win-win cooperation through the Platform Win-Win Growth Index Evaluation.

On September 21, the Ministry held a meeting to listen to small business owners experiencing difficulties due to unfair trade practices by online platforms and to discuss measures for promoting mutual growth.

Lee Byung-kwon, the 2nd Vice Minister of the Ministry of SMEs and Startups, is delivering a greeting at the "Platform Tenant Company's On-site Difficulties Listening Meeting" held on the 21st at the Korea Federation of Micro Enterprise in Yeongdeungpo-gu, Seoul. Ministry of SMEs and Startups

The meeting was attended by small business owners operating on a variety of platforms, including those in the food service, lodging, and real estate brokerage sectors. Representatives from the small business community shared cases of damages and difficulties caused by unfair business practices on platforms, such as excessive intermediary fees, advertising costs, settlement cycles, refund and return policies, and policies favoring the most favorable treatment or self-preferencing practices implemented by platforms.

Specific issues raised included the fact that platform advertising is effectively mandatory rather than optional, excessive inducement to purchase ads, shifting of refund and return processing costs onto vendors without confirming consumer fault or intent, and the imposition of unilateral penalties by platforms that result in reputational damage for tenant businesses.

Lee Byungkwon, Second Vice Minister of the Ministry of SMEs and Startups, emphasized the need for fair trade relationships with platforms, stating, "We will investigate the actual usage of platforms, including the 'total operational burden' such as intermediary fees, advertising expenses, and delivery charges. Furthermore, we will institutionalize the 'Platform Win-Win Growth Index Evaluation,' which quantitatively assesses the level of win-win cooperation between platforms and tenant companies."

Vice Minister Lee also said, "If tenant companies suffer from unfair practices by platforms, we will work with the Fair Trade Commission to address and improve these issues, and we will ensure that tenant businesses can directly utilize data that reflects their operational performance by offering appropriate protection."

He added, "Although the platform industry and relevant associations have strongly opposed the proposed amendment to the Win-Win Cooperation Act, which institutionalizes cooperative relationships on online platforms since it was submitted to the National Assembly, 250 companies have already participated in the index evaluation. Considering the strong need for cooperation and for blocking unfair practices, this amendment will be an important first step toward mutual growth on platforms."

According to a recent survey conducted by the Korea Federation of SMEs on tenant companies of online platforms, 17.8% of small and medium-sized enterprises on online shopping malls and 14.0% of companies listed on delivery apps reported experiencing unfair trade or improper practices. In addition, 67% of small and medium-sized businesses expressed support for regulatory legislation, and the majority believed that "strong sanctions for violations" are necessary to ensure the effectiveness of such laws.

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