President Lee Jae-myung: 'Delivery apps effectively a monopoly... substantive competition needed'
President Lee Jae-myung has personally called out the de facto monopoly of the delivery app market.
President Lee stated, "Delivery apps are effectively in a monopoly state," adding that "a substantive competition system must be established." It has long been pointed out that a small number of domestic delivery app operators have effectively controlled the commission and delivery fee structures. The fact that the top leader has publicly expressed dissent regarding this arrangement suggests that the debate over platform regulation has now moved from a market issue to the realm of presidential policy priorities.
Why Delivery Apps Now
The structural characteristic of the delivery app market is that the intermediary connecting consumers, stores, and riders holds overwhelming bargaining power. If users flock to the platform, stores find it difficult to refuse participation, and if stores flock to it, consumers have no reason to switch to other apps. This is a market where "network effects" operate strongly. As a result, whenever controversies over commission rate or delivery fee hikes arise, criticism has been raised that competitive pressure to check the operators is not functioning.
President Lee’s remark is interpreted as formalizing the government’s recognition of this market structure. With assessments already circulating that market discipline via the Fair Trade Commission (FTC) has expanded since the administration took office, the President’s direct mention is largely analyzed as a message ordering effective measures from the regulator. The expression "substantive competition system" implies a state where consumers and stores actually have choices in terms of price and conditions, rather than just formal competition.
The Significance of the Police Reform Statement Made the Same Day
What is noteworthy is that the remarks on delivery apps and police reform came in the same context. President Lee stated, "The police can exercise the greatest power," and instructed the Prime Minister’s Office to form a police reform body. While the market dominance of delivery apps and the state power of the police belong to different realms, they share the common denominator of being powers that do not check themselves if left unattended.
Previously, President Lee had pointed out the controversy over poor police investigations related to the Jang Mi-ran incident, calling for discipline and institutional improvements. The instruction to review a police reform body is interpreted as a follow-up measure to address the structural failures in investigations at an organizational and institutional level. Based on the premise that entities with power do not reform themselves, the plan is to create an external check mechanism.
Repercussions for the Market and Politics
For delivery app operators, the burden is inevitable to increase. Following the President’s public remarks, it is likely that the FTC’s market investigations or measures regarding fees will pick up speed. Conversely, stores, small merchants, and consumer groups are expected to gain momentum in their demands for greater transparency in intermediary commissions and improved delivery fee structures.
Politically, the direction of the Lee Jae-myung administration’s state governance has become clearer. The principle of checking entities with overwhelming dominance—whether in the market or organizations—through institutions has been confirmed simultaneously in two different areas: delivery apps and the police. Coupled with President Lee’s emphasis on active fiscal policy at a cabinet meeting, stating, "We must not make the mistake of being buried in managing fiscal figures right in front of us," the administration’s confidence in market intervention and institutional reform can be discerned.
Future Focus
There are two immediate points to watch. First, whether the establishment of a competition system will remain an abstract concept or lead to actual regulatory measures. While there are various options, such as mandatory disclosure of commission rates or strengthening scrutiny of dominant business operators under the Monopoly Regulation Act, either path will likely involve legal battles with operators. Next is the composition and authority of the police reform body. It is predicted that the success of the reform will depend on whether it is granted substantive investigative and inspection powers rather than remaining a formal advisory body.
The underlying logic of these recent remarks is that resistance is necessary against unchecked power, whether in the market or in authority. It remains to be seen what answers the two monopolies highlighted by the presidential office will provide before the mirror of institutions, to be confirmed in the latter half of the year's administrative schedule.
