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BackBaemin and Coupang Eats object to the imposition of a fine of 600 billion won, saying, “There is no illegality.”
Baemin and Coupang Eats object to the imposition of a fine of 600 billion won, saying, “There is no illegality.”
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연합뉴스1 hour agoBusiness2 min readSouth KoreaView original

Baemin and Coupang Eats object to the imposition of a fine of 600 billion won, saying, “There is no illegality.”

Woowa Brothers 331.1 billion won, Coupang 308 billion won... Notice of legal action

Quick Look

  • The Fair Trade Commission decided to impose a fine of 331.1 billion won on Woowa Brothers, operator of Baedal Minjok, and 308 billion won on Coupang, operator of Coupang Eats.
  • This is the largest total fine related to delivery apps ever.
  • Both companies objected, saying there was no illegality, and are considering legal action.

AI-generated summary

Why It Matters

The Fair Trade Commission determined that Woowa Brothers and Coupang used the benefits of Wow Store and Baemin Club Store to demand transaction conditions equal to those of competing apps from stores, thereby hindering commission and price competition. It is judged that the company abused its dominant position in the market by demanding the most favorable treatment from stores. In the case of Baemin, the act of reducing exposure to store delivery and distorting the expected delivery time in order to expand its own delivery was also included in the sanctions.

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Woowa Brothers, operator of Baedal Minjok, and Coupang, operator of Coupang Eats, protested on the 9th against the Fair Trade Commission's decision to impose a fine of 331.1 billion won and 308 billion won on the company, respectively.

On this day, Woowa Brothers said, “We have faithfully explained that there is no illegality in this matter,” and “We regret that this explanation has not been fully accepted.”

He then said that as soon as he receives the Fair Trade Commission's resolution, he will closely review the specific contents and continue coexistence efforts for a growing delivery ecosystem with stakeholders.

Coupang Eats refuted that the 'Wow Store' policy was intended to provide reasonable prices and free delivery benefits to consumers amidst high inflation and to help tenant companies increase sales.

It was a latecomer with a market share of only 7% when the policy was introduced, and it was claimed that there was no case in which the store owner terminated the contract because the price conditions were not met.

Coupang Eats also raised issues of fairness regarding the size of the fine.

Compared to the 468 million won fine for a similar delivery application case in the past, this amount is more than 600 times higher.

Coupang Eats argued that the Fair Trade Commission increased the fine by including delivery sales that were unrelated to the charges in the calculation criteria, and that the company's right to defense was damaged in this process.

The two companies plan to review the final resolution and confirm the final response plan, including legal procedures.

The Fair Trade Commission found that both companies took advantage of the benefits provided to WoW stores and 'Baemin Club Stores' to demand transaction conditions equivalent to those of competing applications (apps), thereby hindering commission and price competition.

Due to the judgment that the company abused its dominant position in the market by demanding the most favorable treatment from stores, the total fines imposed by the Fair Trade Commission on delivery apps are the largest ever.

In the case of Baemin, the act of reducing exposure to store delivery and distorting the expected delivery time in order to expand its own delivery was also included in the sanctions. The suspicion of Coupang's WoW membership bundling has not been concluded at this time and will be reexamined.

What to Watch

AI outlook — possibilities, not facts

  • Woowa Brothers and Coupang will proceed with legal procedures, including administrative litigation, regarding the Fair Trade Commission's disposition.

    Likely · Within weeks

  • A reexamination will be conducted on the suspicions of Coupang's WoW membership bundling.

    Very likely · Within weeks

Open Questions

  • What is the final legal response plan of both companies?
  • What will be the result of the re-examination of Coupang's WoW membership bundling suspicions?
  • What is the schedule and method for paying fines?

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This article was originally published by 연합뉴스.

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