Unfair Contract Terms Identified by Korea Fair Trade Commission
The Korea Fair Trade Commission (KFTC) has identified and ordered corrections for 10 types of unfair standard contract terms used by delivery app platforms, including clauses that impose excessive burdens on restaurant owners. These issues were found in the terms of Coupang Eats and Baemin, with the KFTC urging immediate revisions.
Discount Coupons Still Subject to Full-Price Commission
One of the most problematic practices identified was related to how Coupang Eats calculated its fees. For example, when a consumer orders a 20,000 Korean won chicken dish for 15,000 Korean won using a restaurant’s own coupon, the restaurant bears the 5,000 Korean won discount cost. However, Coupang Eats charges fees based on the pre-discount price of 20,000 Korean won instead of the actual sales price of 15,000 Korean won. With a 7.8% commission rate, this means restaurants had to pay 1,560 Korean won instead of the correct 1,170 Korean won—an additional 390 Korean won per order.
The KFTC highlighted that restaurants are facing a double burden: covering discount costs to attract customers while also paying fees on the undiscounted amount they never sold. In contrast, Baemin and Yogiyo applied fees based on the post-discount sales price. The KFTC recommended that Coupang Eats revise this clause within 60 days.
Exposure Restrictions During Bad Weather or Peak Hours
Another issue involved restaurants suddenly disappearing from delivery app search results during bad weather or peak hours. Baemin and Coupang Eats limited exposure ranges under such conditions but failed to notify restaurants in advance. The KFTC explained that restaurants were left unaware of why orders abruptly stopped. It ordered the platforms to inform restaurants of exposure restrictions, including reasons and scope.
Excessive Compensation Obligations for Canceled Orders
The most burdensome clauses for restaurant owners were excessive compensation obligations and liability transfers. Coupang Eats’ terms required restaurants to pay 10% of the sales amount as customer compensation if orders were canceled due to unannounced closures, stock shortages, system errors, or closures. For example, canceling a 20,000 Korean won order due to sold-out items required a 2,000 Korean won compensation fee. The KFTC deemed this unfair, stating that stock shortages or system errors are not highly blameworthy, and actual damages are minimal since consumers can immediately order from another restaurant. Coupang Eats agreed to delete this clause.
Refund costs were also problematic. Coupang Eats’ terms required restaurants to cover refunds even if customers consumed food, were absent, or refused returns. The KFTC ordered this clause to be deleted as well.
Exemption clauses shifting all dispute liability to restaurants were also revised. Baemin and Coupang Eats previously stated in their terms that they bore “no responsibility” or “no liability” for issues related to origin labeling, seller information, or customer service. The KFTC mandated revisions to hold delivery apps accountable for their own intentional or negligent actions.
Clauses allowing unilateral suspension or changes to payment schedules were also corrected. Both platforms had vaguely defined suspension reasons or included non-essential cases. The KFTC required them to specify suspension grounds and pay delays interest if caused by the app’s fault.
Additional Corrected Clauses
Additional corrected clauses included:
- Notifying restaurants of term changes via public notice without individual communication
- Limiting ad refund periods to six months
- Imposing arbitrary obligations requiring unconditional compliance
- Allowing extra contractual duties via separate policies
- Revising a clause permitting unrestricted deletion of restaurant reviews to require prior notice and an objection process
An Era Where Restaurants Cannot Survive Without Delivery Apps
The KFTC’s full review of delivery app terms reflects the platforms’ status as essential for the survival of the food service industry. According to the Ministry of Data and Statistics, online food service transactions grew from 31.6 trillion Korean won in 2022 to 36.9 trillion Korean won in 2024—a 17% increase over two years. Three out of 10 local restaurants now use delivery apps.
Baemin and Coupang Eats collectively hold over 90% of the 2024 delivery market. For restaurants, avoiding these platforms means losing access to customers. The KFTC plans to issue mandatory correction orders if Coupang Eats fails to revise its fee criteria within 60 days. Both Baemin and Coupang Eats submitted correction plans for the remaining unfair clauses and stated they would revise their terms shortly.