South Korea Fines Baemin and Coupang $440 Million Over Food Delivery Competition Violations

Key Takeaways

• Major Competition Penalties: South Korea's KFTC imposed approximately $440 million (KRW 631.9 billion) in provisional fines on Baemin and Coupang for anticompetitive practices in the food delivery market.
• Restaurant Pricing Restrictions: Both platforms imposed MFN requirements that limited restaurants' ability to offer better prices and commercial terms through competing services.
• Abuse of Market Dominance: Baemin pressured restaurants toward its more expensive own-delivery service, increasing costs and harming independent delivery agencies.
• Misleading Delivery Estimates: Baemin presented marketplace deliveries as approximately 13 minutes slower than its own-delivery option, despite marketplace deliveries being slightly faster on average.
• Additional Corrective Orders: Coupang must revise provisions that calculated restaurant commissions using pre-discount prices rather than amounts actually paid by customers.

Deep Dive

South Korea's competition regulator has imposed approximately $440 million (KRW 631.9 billion) in provisional fines on food delivery platforms Baemin and Coupang for restricting restaurant pricing and engaging in other practices that undermined competition in the country's food delivery market.

The Korea Fair Trade Commission (KFTC) announced the penalties following an October 29 decision against Woowa Brothers, which operates Baemin, and Coupang, the operator of Coupang Eats. Baemin faces approximately $231 million (KRW 331.1 billion) in provisional penalties, while Coupang faces approximately $210 million (KRW 300.8 billion).

The regulator found that both companies abused their dominant market positions by requiring restaurants to offer them terms at least as favorable as those available on competing delivery platforms. Baemin was also sanctioned for pressuring restaurants to adopt its more expensive delivery service and misleading customers about estimated delivery times.

The findings followed an investigation launched in May 2025 by a KFTC task force examining unfair practices in the food delivery industry. Baemin and Coupang accounted for 58.45% and 34.44%, respectively, of South Korea's food delivery app market by order value in 2025.

According to the commission, their conduct contributed to higher platform fees and menu prices while limiting opportunities for smaller competitors to attract restaurants.

Restrictions on Restaurant Pricing

Coupang began imposing most-favored-nation (MFN) requirements on restaurants in July 2023, shortly after introducing food delivery discounts through WOW, its online shopping membership program. Restaurants participating in the program were required to offer Coupang terms at least as favorable as those provided through competing platforms. The requirements covered six areas, including menu prices, minimum order amounts, discounts, delivery fees, menu availability, and operating hours.

Restaurants that failed to comply risked losing their WOW-designated status and the associated membership benefits. Between August 2023 and June 2024, Coupang also operated a system that allowed it to modify restaurants' transaction terms directly.

Baemin introduced similar restrictions in May 2024 through its Baemin Club subscription program. Restaurants were required to maintain comparable menu prices, minimum order amounts, and discounts across competing services to retain their Baemin Club designation.

The KFTC found that restaurants excluded from either program experienced significant declines in sales, leaving many with little practical choice but to accept the restrictions.

Compliance with Coupang's requirements among WOW-designated restaurants increased from approximately 13% in July 2023 to 94% in October 2025. Among Baemin Club restaurants, compliance rose from approximately 63% in May 2024 to 80% in January 2025.

The commission concluded that both companies had abused their market dominance and superior bargaining positions by interfering with restaurants' ability to determine their own commercial terms. The restrictions also weakened competition from smaller delivery platforms. Restaurants could not freely offer lower menu prices on competing services, even when those platforms charged lower commissions.

The KFTC said the simultaneous requirements imposed by the two largest operators produced anticompetitive effects resembling collusion, including elevated and increasingly uniform platform fees. Baemin increased its own-delivery commission rate from 6.8% to 9.8% in August 2024, while Coupang maintained what the regulator described as high platform fees.

Baemin Pressured Restaurants to Switch Delivery Services

The commission separately found that Baemin had used its dominant position to push restaurants away from its marketplace delivery model and toward its own-delivery service. Under Baemin's marketplace model, the platform acts as an intermediary between restaurants and customers, while deliveries are generally handled through independent arrangements. Its own-delivery service handles both order processing and delivery.

Restaurants had generally preferred the marketplace model because it offered lower fees and greater flexibility over menu prices and minimum order amounts. Beginning in August 2023, Baemin introduced changes that reduced the attractiveness of the marketplace option. The company limited the visibility of marketplace restaurants, integrated restaurant listings across its delivery models, altered the presentation of estimated delivery times, and discontinued a flat-rate advertising option known as Ultra Call.

The KFTC found that the measures were intended to increase the use of Baemin's more profitable own-delivery service and ultimately eliminate the marketplace model.

Although the changes began in 2023, the regulator determined that the conduct became coercive for purposes of establishing a violation in March 2025, when Baemin integrated marketplace and own-delivery restaurant pages.

Between June 2021 and July 2025, the number of restaurants using Baemin's own-delivery service, including those using both models, increased from approximately 64,000 to 271,000. The number using its marketplace service declined from 256,000 to 91,000.

The commission found that the shift increased costs for restaurants, contributing to higher minimum order amounts and menu prices for consumers. Independent delivery agencies also lost business as more orders moved into Baemin's delivery network. Some agencies were forced to leave the market, according to the regulator.

The KFTC concluded that Baemin's conduct restricted competition in both the food delivery app market and the separate delivery services market, potentially making it harder for new competitors to enter either industry.

Misleading Delivery-Time Estimates

Baemin was also sanctioned for presenting delivery estimates that made its marketplace service appear substantially slower than its own-delivery option. The commission found that Baemin used different calculation methods for the two services without adequately informing consumers.

Marketplace estimates were based on delivery times entered by restaurants, while estimates for Baemin's own-delivery service were calculated using actual delivery performance. Between April 2023 and July 2025, marketplace deliveries took an average of approximately 31.5 minutes, but customers were shown an estimated delivery time of 44.7 minutes.

Baemin's lower-cost own-delivery option, Saver Delivery, took an average of 32.9 minutes, while its displayed estimate was 31.7 minutes. Marketplace deliveries were therefore approximately 1.4 minutes faster in practice, even though the estimates suggested they would take about 13 minutes longer.

The KFTC found that Baemin was aware of the differences in calculation methods and identified indications that the company had intentionally adjusted delivery estimates to make its marketplace service appear less attractive.

The regulator determined that the practice constituted deceptive advertising through the concealment or downplaying of relevant information. Baemin's provisional penalties include approximately $111.6 million (KRW 160.2 billion) for imposing MFN requirements, $108.3 million (KRW 155.4 billion) for pressuring restaurants to switch delivery models, and $10.7 million (KRW 15.4 billion) for deceptive delivery-time advertising.

Coupang Ordered to Revise Fee Calculations

In a separate October 27 decision, the KFTC ordered Coupang to change provisions governing how it calculates commissions and payment processing fees charged to restaurants. Under Coupang's restaurant fee policy, platform commissions ranged from 2% to 7.8% of order value, excluding value-added tax, while payment processing fees were set at 3%.

The company calculated those fees using the original selling price before discounts, rather than the amount customers actually paid. As a result, restaurants were charged commissions on discounts they had funded themselves, even though those amounts were not part of the revenue they received.

The KFTC found that the practice unfairly disadvantaged restaurants and differed from ordinary fee-calculation practices used by other domestic and international delivery platforms.

Coupang must amend the relevant provisions within 60 days of receiving the corrective order, following consultation with the regulator. The commission determined that the provisions violated South Korea's Act on the Regulation of Terms and Conditions.

The KFTC said the corrective measures should allow restaurants to set prices, discounts, and minimum order amounts independently across delivery platforms, potentially strengthening competition from smaller operators.

The regulator also expects its restrictions on Baemin's conduct to give restaurants greater freedom to choose between marketplace and own-delivery services, while improving conditions for independent delivery agencies. The commission said stronger competition could eventually benefit consumers through lower costs and more accurate information about delivery services.

A separate proceeding involving allegations of coercive transaction practices by Coupang remains unresolved. The KFTC ordered additional examination after disagreements over the interpretation of tying arrangements prevented a comprehensive deliberation.

The regulator said it would continue monitoring unfair practices in the platform sector and pursue enforcement against companies found to have violated competition law, regardless of whether they are domestic or foreign-owned.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey