Bipartisan Push for Delivery App Fee Cap Gains Momentum Through National Assembly Audit

Legislation to cap delivery app fees has begun moving in earnest, spurred by the National Assembly's government audit.

According to Yonhap News, bills to impose a cap on the commissions delivery app platforms charge merchants, or to reduce their overall burden, are being raised on both sides of the aisle following the audit. With the political sphere, which had previously put forward separate drafts, now converging in essentially the same direction, observers say the chances of a bill that can actually be voted on have grown significantly.

Why This Issue Has Come to a Head Now

The delivery app market is dominated by a handful of platforms. For merchants, staying off delivery apps makes generating revenue itself difficult. The problem is the fees. Critics have repeatedly pointed out that, by common industry standards, intermediary and delivery fees combined siphon off a substantial share of sales to the platforms. In particular, the delivery market's rapid growth since COVID-19 deepened small business owners' dependence on platforms, and with fee hikes compounding the inflationary environment, calls for regulation — led by small business groups — have grown persistent.

The issue was also a core focus at the government audit. As lawmakers from both parties took issue with platforms' fee structures, legislative action became a follow-up task. At the heart of the case for regulation is the criticism that leaving the market to its own devices under an oligopolistic structure has led not to price competition but to fee increases.

Key Provisions and Who Would Be Covered

The bills under discussion rest on two pillars. One would impose a statutory cap on commission rates charged to merchants; the other would reduce the overall burden, including ancillary costs such as advertising fees. The measures would apply to online platform operators above a certain size — in effect targeting the large platforms that dominate the delivery app market.

Where to set the cap will be the crux of future negotiations. Set too low, it could erode platforms' resources for delivery worker compensation and technology investment; set too high, it loses its effectiveness. The gap between industry and small business groups over what rate is appropriate remains considerable. However, provisions strengthening transparency — requiring platforms to disclose the basis for calculating fees — face relatively little opposition and are likely to make it into the final bill.

Where Supporters and Opponents Divide

The case for the legislation is clear: allowing platforms to unilaterally set fees based on their market power would structurally erode self-employed workers' profits. Small business groups argue that fee burdens are ultimately passed on to consumer prices, fueling inflation.

Opposition concerns are no less weighty. The biggest sticking point is cost pass-through. If a cap takes effect, platforms may seek to recoup lost revenue through higher delivery fees or expanded paid services for merchants. Overseas experience has indeed shown consumer delivery fees rising after fee caps were introduced. The platform industry counters that regulation could degrade service quality and shrink delivery workforces. Business circles also voice caution, arguing that price regulation could distort market mechanisms.

In the end, the debate is narrowing from whether to regulate to how. The platforms' response will differ depending on whether the law takes a comprehensive approach covering total fee burdens or a partial one targeting only intermediary commissions.

Legislative Timeline and Market Outlook

As the government audit wraps up, the relevant bills are expected to be pending in the National Assembly's standing committees or newly introduced. With bipartisan consensus largely formed on the need for regulation, the key will be coordinating the cap level and whether ancillary costs are included. Given the platform industry's pushback and the need to reconcile competing interests, however, passage is likely to move cautiously.

The market impact cuts both ways. In the short term, relief for small business owners' fee burdens is expected, but if costs are passed through as delivery or advertising fees, the burden could boomerang back onto consumers. The regulation's effectiveness will ultimately hinge on sophisticated design that also blocks pass-through channels. As Charles Kettering said, the world hates change, yet it is the only thing that has brought progress. But whose interests this particular change serves will be decided line by line in the bill's wording.