South Korea Drafts Policy To Prevent Platform Monopolies

The South Korea Fair Trade Commission (KFTC) announced it will submit a new law to prevent possible power abuse by online platform operators such as Woowa Brothers and Naver, reported The Korea Times

The size and influence of online business here have increased because of the COVID-19 pandemic and the antitrust watchdog is seeking to enact legislation to prevent leaders in the field from monopolizing the market and taking advantage of their superior position.

First, the KFTC is set to propose a law regulating the transactional relationship between platform operators and entrants. It wants to establish a legal basis to intervene in setting commission rates and allocating costs for promotional activities of small- and medium-sized enterprises that are vulnerable to unfair contract terms. 

The country’s second largest food delivery player Yogiyo, operated by Delivery Hero Korea, has previously forced restaurant owners to offer the cheapest price on their platform and the antitrust watchdog imposed a 468 million won (US$389,824) penalty for price manipulation. 

Baedal Minjok, the No.1 player operated by Woowa Brothers that is under review for a merger with Germany’s Delivery Hero, also had to revise a similar unfair clause designed to divert its responsibility to the seller when a transactional problem arises between a restaurant and customer.

Full Content: Korea Times

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