During a National Assembly audit on October 12, Kim Yong-seok, vice president of Woowa Brothers, the operator of Baedal Minjok (Baemin), faced intense questioning from lawmakers regarding allegations of restricting discounts for partner companies and issues related to the 'one-house delivery' naming confusion and overseas parent company fund transfers. Fair Trade Commission Chairman Joo Byeong-ki confirmed the agency's intent to investigate promotional restrictions by competing platforms.
According to industry sources on October 13, the core issue raised during the inquiry was Baemin's rebranded 'Promotion Only' system, which replaced the previous 'Baemin Only' designation. Democratic Party lawmaker Son Myung-soo pointed out that despite the name change, the conditions preventing discounts or coupon promotions from other delivery apps during promotional periods remained unchanged. Emails and contract clauses from franchise headquarters shared by Son included stipulations that prohibited partner companies from offering coupons or price discounts through competing delivery apps.
Son criticized the structure, stating, 'The burden of discount costs in price competition among delivery apps falls on small business owners and self-employed individuals, ultimately benefiting Baemin.' In response, Vice President Kim explained that the promotion was implemented with the agreement of partner companies and was intended as temporary support. However, when Son pressed for a specific answer on whether the structure guaranteed the free participation of partner companies, Kim could not provide a clear response. Chairman Joo stated that he would review the submitted materials for any legal violations.
The operation of Baemin's 'one-house delivery' system was also scrutinized. Democratic Party lawmaker Han Min-soo noted that Baemin's integration of 'one-house delivery' and 'thrifty delivery' while maintaining the 'one-house delivery' name could mislead consumers into thinking they were receiving direct deliveries. When asked if there had been instances of delivering the last order received first, Vice President Kim acknowledged this but insisted that the principle of immediate delivery was being upheld. However, he admitted that consumer notification regarding the integrated dispatch was insufficient and promised to improve the system.
Concerns regarding fund transfers to the overseas parent company also led to allegations of evasive dividends. One lawmaker raised the possibility that Woowa Brothers' buyback and cancellation of approximately 490 billion won worth of its own shares last year could have been misused as a means to reduce tax burdens while providing a practical dividend effect.
Vice President Kim refrained from specific comments, citing an ongoing tax investigation by the National Tax Service, stating, 'We will cooperate fully with the investigation.' Previously, the National Assembly's Finance Committee had selected Kim Beom-seok, CEO of Woowa Brothers, as a witness to examine the structure of overseas fund transfers and tax appropriateness.
Democratic Party lawmaker Min Byeong-deok pointed out that Baemin and Coupang Eats restrict the use of specific terms such as 'phone orders,' 'commissions,' and names of other platforms in notices to partner companies and store introductions. Min argued that preventing partner companies from offering their own packaging discounts or marketing constitutes undue interference in business operations.
Chairman Joo stated, 'We will closely examine whether the arbitrary establishment of trading rules by platforms infringes on the business freedom of trading partners.' The Fair Trade Commission rejected a self-correction plan worth 360 billion won submitted by Baemin and Coupang Eats in June and is currently proceeding with a substantive review of allegations of abuse of market dominance, including demands for the best treatment. If violations are confirmed, Baemin could face fines ranging from 239 billion to 510 billion won, while Coupang Eats could incur fines between 25 billion and 42 billion won. The Fair Trade Commission plans to finalize the review schedule within the year.
Meanwhile, Baemin remains on high alert following the recent audit by the National Assembly's Political Affairs Committee. There are indications that Kim Beom-seok, CEO of Woowa Brothers, may be called as a witness in the comprehensive audit starting on October 26. The National Assembly's Finance Committee had previously selected Kim Beom-seok as a witness for the National Assembly audit on September 28.
* This article has been translated by AI.
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