Baemin and Coupang Eats to review ruling before deciding next steps

Coupang Eats calls sanctions 'double standard,' says pro-consumer policy was mislabeled illegal

Baemin says most-favored-nation clause was minimum defensive measure

The headquarters of Woowa Brothers, the operator of Baemin. [Woowa Brothers]
The headquarters of Woowa Brothers, the operator of Baemin. [Woowa Brothers]

South Korea's two largest online food delivery platforms, Baemin and Coupang Eats, have signaled they will file administrative lawsuits after being hit with a combined 600 billion won ($443 million) in fines — the largest in history — over allegations that they demanded most-favored-nation treatment from partner restaurants.

Baemin said its most-favored-nation clause, introduced under the Baemin Club store conditions, was a minimum defensive measure taken amid intensifying market competition. Coupang Eats also pushed back strongly, saying the Korea Fair Trade Commission had wrongly labeled a pro-consumer, co-prosperity policy as illegal.

According to industry sources, the Fair Trade Commission on Monday handed down fines of 331.1 billion won to Baemin and 380 billion won to Coupang Eats. Both platforms said they would map out their next steps once they receive the formal written ruling.

The commission determined that by simultaneously demanding most-favored-nation treatment, the two platforms effectively produced cartel-like outcomes — including the alignment of commission rates and the synchronization of transaction terms. The most-favored-nation requirement obligated partner restaurants to match food prices, minimum order amounts and other conditions across competing delivery platforms.

Coupang Eats was first to respond, saying the commission had "wrongly concluded that our efforts to offer customers food at reasonable prices were illegal."

"Many restaurants were charging different, higher prices for the same food made in the same kitchen depending on which delivery platform customers used," Coupang Eats said. "Coupang Eats designated restaurants as Wow stores when they agreed not to sell food to our customers at prices higher than those on the No. 1 delivery platform, and when they provided good service."

Coupang Eats said its prediction had come true — that as customers spending less on food and delivery fees placed more orders, restaurant owners' sales would grow alongside. "This was a co-prosperity policy that was a win-win for both consumers and restaurant owners, and the commission's conclusion that it was simply 'illegal' is wrong," it added.

Coupang Eats also raised concerns about the fairness of the sanctions, citing the case of Yogiyo, which was fined 460 million won after being found to have forced restaurants to offer the lowest prices.

"In the Yogiyo case, the commission imposed a flat fine because it said it was difficult to calculate the relevant sales figure," Coupang Eats said. "But for Coupang Eats, it used total delivery sales as the basis — including sales from restaurant owners we never even contacted — and imposed a fine more than 600 times larger than what it levied on Yogiyo." The company called the disparity "a textbook double standard."

Coupang Eats said it had "promoted competition and pursued shared growth through free delivery" and that it planned to "thoroughly review the final written ruling and fully present our position through proper legal procedures."

A Coupang Eats advertisement. [YouTube/Coupang Eats]
A Coupang Eats advertisement. [YouTube/Coupang Eats]

Baemin, for its part, defended its introduction of the most-favored-nation clause under the Baemin Club store conditions, saying it was "a minimum defensive measure adopted amid a rapidly shifting competitive landscape that followed a rival's membership-based most-favored-nation demands over the course of more than a year."

Baemin said the vast majority of stores had been selected as Baemin Club stores regardless of pricing conditions, and that the platform had never forcibly altered the pricing terms of partner restaurant owners.

The commission had also taken issue with Baemin steering restaurants toward its own higher-margin in-house delivery service rather than the store-managed delivery option. Baemin rebuffed the finding, saying its in-house delivery was "a service for which the platform takes direct responsibility — from order brokerage and delivery to customer support and accident compensation." Unlike its rivals, Baemin said, it offered both in-house and store-managed delivery, allowing more customers and restaurant owners to use the Baemin app.

"The profit we retain per order is actually higher for store-managed delivery," Baemin added. "The growing share of in-house delivery reflects consumer preference driven by delivery quality."


sjpark@heraldcorp.com