Delivery App Fines Stir Controversy... "Industry Contraction Feared More Than Fair Competition"

Woowa Brothers: "There Was No Illegality"
Coupang: "Wrongly Deemed a Shared-Growth Policy Illegal"
Will Carefully Review and Respond Upon Receiving the Written Resolution

The Korea Fair Trade Commission (KFTC) said on Nov. 9 that it would impose massive fines of more than KRW 300 billion each on Woowa Brothers and Coupang Eats over their demands for most-favored treatment and other practices. This has prompted concerns in the industry that sanctions intended to ensure fair competition could instead undermine the delivery industry. The astronomical fines could reduce delivery app companies' capacity to support small businesses, potentially affecting their efforts to promote shared growth.

Woowa Brothers, the operator of Baedal Minjok (Baemin), said in response to the KFTC's decision to impose fines that it had "faithfully explained why there was no illegality in this matter." It added, "We regret that our explanation was not sufficiently accepted, and will carefully review the details as soon as we receive the KFTC's written resolution." Woowa Brothers also said, "We will continue our efforts to promote shared growth and build a delivery ecosystem that grows together with stakeholders." Coupang said, "The KFTC's decision is wrong because it simply deemed illegal a shared-growth policy that could have been a 'win-win' for both consumers and restaurant owners." It added, "After carefully reviewing the final written resolution, we plan to fully present our position through the proper legal procedures."

The KFTC considered the demands for most-favored treatment especially serious in this case. This refers to requiring a trading partner to apply terms equal to or more favorable than those offered to competitors. Woowa Brothers was fined KRW 160.2 billion for such demands, while Coupang Eats was fined KRW 300.8 billion. In March 2023, Coupang Eats offered discounts to members of Coupang Wow and, as a condition for selection as a "Wow Store," required that prices not be set lower than on competing platforms. In May 2024, Baemin also stipulated that "prices must be no higher than on Coupang Eats" as one of the conditions for selection as a "Baemin Club Store." Baemin ended this practice in October 2025, and Coupang Eats did so in January 2026. In addition, Baemin was fined over its preferential treatment of the Baemin Delivery service and its unfair advertising of estimated delivery times.

Industry observers say the companies had expected a different outcome, given that both had taken proactive corrective measures and drawn up plans to support affected merchants using their platforms, yet were ultimately hit with massive fines. In May 2025, Woowa Brothers and Coupang Eats applied to the KFTC to begin a consent decree process and submitted a proposed decree worth KRW 360 billion, but it was rejected. The plans included delivery fee support for small businesses using the platforms, measures to ease the burden of brokerage fees, and the establishment of a shared-growth cooperation fund. Because the legal process required for fines to be finalized can take a long time, the companies had prepared swift, practical support measures for affected small businesses, but those plans fell through.

Small business groups also raised this concern. They said that even if the fines are upheld after years of administrative litigation, they will go to the state treasury and do nothing to help affected small businesses. Song Chi-young, chairman of the Korea Federation of Micro Enterprise, said, "The KFTC's massive fines will not lead to a real recovery for small businesses. Under the current system, even if astronomical fines are imposed, not a single won in compensation goes to the small-scale restaurant owners who suffered the direct harm. Instead, the fines could completely wipe out platforms' capacity to support businesses on the ground, including by lowering fees for small businesses and offering promotional support." A delivery industry official said, "Many small business groups have said that immediate, practical support is more urgent than a lengthy legal battle," adding, "There are concerns that the KFTC's massive fines could undermine support policies and shared-growth plans that platforms should put in place to improve the profitability of merchants using their services."

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