President Lee Calls Delivery App Market 'Strongly Oligopolistic,' Cites Growing Fee Burdens

President Lee Jae-myung has pointed out the issue of high fees charged by delivery platforms, describing the delivery app market as a "practically strong oligopoly," and instructed government ministries to devise measures to resolve the situation.

Presiding over the 37th Cabinet meeting at the Blue House today (the 25th) after receiving reports on the implementation of follow-up measures for government ministry work reports, President Lee opened the discussion by asking, "Aren't there complaints that delivery app fees are too expensive?"

He criticized, "Simply applying pressure from the Fair Trade Commission is not the way to solve this. While that is one method, we at least need to create a genuine competitive system," adding, "I judge that the (delivery platform market) is effectively in a monopoly state."

He then asked, "Weren't there about three major delivery app companies, and didn't it pass because one was excluded, keeping it under 90%?"

Nam Dong-il, Vice Chairman of the Fair Trade Commission (FTC), explained the mergers and acquisitions process of delivery platform companies, stating, "Both companies (Baemin and Coupang Eats) account for a market share of around 93%, and the monopolistic and oligopolistic structure has somewhat solidified."

The case mentioned by President Lee and Vice Chairman Nam Dong-il is the corporate combination that took place in 2020 when Germany's Delivery Hero (DH) acquired Woowa Brothers, the operator of Baedal Minjok (Baemin).

At the time, Baemin held the top market share, while DH's South Korean subsidiaries, Yogiyo and Baedal Tong—operated by Delivery Hero Korea (DHK)—ranked second and third, respectively.

At the time, the FTC permitted the corporate combination under the condition that DH sell 100% of its stake in Delivery Hero Korea (DHK) to a third party in order to acquire Baedal Minjok (Baemin).

The intention was for DH to acquire Baemin while selling Yogiyo to maintain a competitive structure.

However, as Coupang Eats subsequently grew rapidly, Yogiyo slipped to third place, leaving Baemin and Coupang Eats to occupy more than 90% of the current delivery app market.

President Lee diagnosed the current situation as a "practically strong oligopoly," noting, "As a result, there are many grievances that the burden of delivery fees on self-employed individuals continues to grow."

He then urged, "Ministries need to review what measures can be taken to secure substantive competition."

In response, Lee Byung-kwon, Vice Minister of SMEs and Startups, reported on plans to provide marketing support for public delivery apps operated by local governments.

The reported content included reviewing plans to intensively support marketing costs for around three top-performing apps out of the 12 public delivery apps currently operated or supported by local governments.

President Lee remarked, "While there are some that are operating successfully, aren't they actually high in inefficiency?" and emphasized, "While it may be necessary to provide financial support through subsidies, what is more important is integrating management."

He further instructed, "Local governments are likely not trying to make money or exercise personnel authority," adding, "Focus on grouping (management) overall and providing support permitted under domestic laws or international transactions so that they can effectively compete."

(Photo: Provided by the Blue House Press Corps, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.