Coupang Eats and Baemin Hit with Record 300 Billion Won Fine Each

Coupang Eats and Baedal Minjok (Baemin) have each been fined 300 billion won by the Fair Trade Commission — the largest penalty ever in South Korea's delivery industry. The FTC determined that the two companies, which together control 90% of the delivery market, engaged in de facto collusion by demanding the 'best terms' from each other until their commission rates became identical — in effect, secretly coordinating the market. The fallout landed on restaurants and consumers.

From 2023 through January of this year, Coupang Eats required restaurants on its platform to match their food prices, minimum order amounts, and other conditions with those on rival delivery apps. As Coupang Eats' market share grew, Baemin followed suit from 2024, operating its 'Baemin Club' program and making the same demands of its member restaurants.

There were also cases of restaurants being pressured to lower prices. One business lowered its prices on the Baemin app last year, only to face pressure from Coupang Eats threatening to revoke its 'Wow Store' status. The Wow Store designation offers annual discounts and free delivery benefits, so losing it can deal a serious blow to revenue. "They told me they would revoke my Wow status, terminate my account — my hands were trembling, but I had no choice but to listen," said Mr. Ko.

The sanctions also cover Baemin's forcing member restaurants to use its exclusive delivery service. "These are practices that run counter to normal business customs and constitute interference with the business activities of member restaurants," said Hwang Won-cheol, a standing commissioner at the Fair Trade Commission.

Coupang Eats and Baemin maintain that they committed no wrongdoing. Both companies said they will review the FTC's final decision and decide on their response, including possible legal action.