Fair Trade Commission to investigate allegations of ‘food value standardization’ and bullying
Baemin targets Coupang Eats, claiming competitors started first in August last year
“Cannot just sit and watch without taking defensive measures if there are no sanctions from authorities”
Investigation on ‘Same Price Certification System’ also ongoing…Baemin says “no coercion”, ‘[Edaily Reporter Kim Kyeong-eun] Baemin is under investigation by the Fair Trade Commission for allegedly pressuring partner stores for preferential treatment, and in response, they protested by stating, “Competitors started first.” Coupang Eats, a competitor, reportedly pressured partner stores to match food prices and discount benefits to the same level as their own, forcing Baemin to respond accordingly.’,
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, ‘On the 29th, Baemin’s operator Woowa Brothers posted a “Statement on the Initiation of the FTC’s Investigation” on its homepage, stating, “Competitors started demanding preferential treatment for operators first in August last year.” This was interpreted as a defense using Coupang Eats, a competitor, after reports emerged that the FTC is investigating Baemin for potential violations of the Fair Trade Act.’,
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, ‘In the statement, Woowa Brothers pointed out, “At that time, the competitor offered a 10% discount on membership orders, which required operators to set menu prices and customer delivery fees no higher than those of other companies and to match their own coupon and other discount offers with those of other companies.” They further stated, “Starting at the end of March this year, we continued to demand preferential treatment by introducing free delivery for membership orders.”’,
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, ‘“However, the authorities did not take action to sanction this,” Woowa Brothers said in the statement. “When we started offering free delivery to Baemin Club members in May this year, it was not something we could avoid in terms of defense. Considering that if one party’s preferential treatment is accepted in a competitive situation, another party does not respond, it can put the latter at a disadvantage in competition. Unlike competitors who directly change the transaction conditions such as prices of individual operators, we purely provided benefits and information in response.”’,
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, ‘They also mentioned the damages caused by Coupang Eats’ preemptive preferential treatment. Although they applied the industry’s lowest mediation fee, the explanation was that benefits resulting from Coupang Eats’ forced preferential demands did not reach Baemin’s customers.’,
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, ‘“Due to the competitor’s preferential demands, despite applying the industry’s lowest mediation fee (6.8%), we experienced a situation where it was difficult to offer benefits such as menu price reduction to our customers,” Woowa Brothers explained. “As we applied a 3% lower mediation fee compared to the competitor, operators could have used this to lower menu prices, reduce delivery fees, or utilize it for customer-targeted marketing discounts. However, due to the competitor’s forced preferential demands, this was blocked. Therefore, we had to come up with measures to overcome this situation.”’,
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, ‘Regarding the ‘Same Price Certification System’ under investigation by the Fair Trade Commission, they clarified that there is no coercion involved. When partner stores began charging higher prices through the delivery app due to delivery fees, Baemin introduced the same price certification system in July. This system verifies that the price of food on the app is the same as the price at the store, and a “Same Price as Store” badge is given to operators validated under this procedure.’,
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, ‘Woowa Brothers explained, “The ‘Same Price as Store’ badge is a system that provides consumers with information to prevent negative experiences due to dual pricing operations by businesses,” adding, “The authority to set prices on delivery app menus lies with the operators. The ‘Same Price as Store’ badge is given voluntarily upon request by stores that operate with the same prices for store and delivery, providing consumers with information voluntarily, and does not constitute any form of coercion or control.”’,
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, ‘They also commented on insufficient notification about dual pricing within delivery apps raised by the Consumers Union last year. “If there is dual pricing, it should be communicated to consumers,” was the interpretation. Additionally, they added, “We are also operating a certification system for food hygiene in the same manner as for the same price as store standards.”’,
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