(Photo= Yonhap news)

 

[Alpha Biz= Reporter Kim Sangjin] As of the 29th, reports indicate that Korea's Fair Trade Commission (KFTC) is investigating Baemin (Baedal Minjok) over allegations of violating fair trade laws.

The central issue under scrutiny is whether Baemin has demanded that restaurant owners set menu prices lower than or equal to those on other delivery apps, a practice referred to as "most-favored-nation" (MFN) clauses.

The KFTC views these MFN clauses as a key factor inhibiting competition among delivery apps and contributing to rising commission fees. For instance, in the absence of MFN provisions, if Platform A raises its commission fee from 1,000 KRW to 3,000 KRW, the restaurant owner could increase the selling price on Platform A by only 2,000 KRW while keeping prices unchanged on other platforms.

However, if MFN clauses are in effect, even if only Platform A increases its commission, restaurant owners are compelled to either reflect that increase in their pricing or raise prices uniformly across all platforms.

The KFTC has initiated its investigation based on concerns that these unfair practices are a significant contributor to the continuous rise in commission fees within the delivery app market and the increasing burden on small business owners.

 

 

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