South Korea Fines Food Delivery Giants Coupang and Baemin $467 Million Over Pricing Rules

South Korea's antitrust regulator has levied a record 631.9 billion won ($467 million) in fines against the country's two dominant food delivery platforms. The Korea Fair Trade Commission penalized Woowa Brothers and Coupang on Monday for enforcing strict pricing rules on partner restaurants.[2][3]

The combined penalty marks the largest ever imposed on delivery application operators in the country. Regulators concluded that the platforms abused their market power to restrict how affiliated restaurants priced their menus and structured their promotions across competing channels.[4]

Woowa Brothers, the operator of the Baemin platform, faces a provisional fine of 331.1 billion won. Coupang, which operates the rival Coupang Eats service, was fined 300.8 billion won. The two companies currently account for more than 90 percent of South Korea's food delivery market.[2][3]

Enforcing Market Parity

The regulatory action centers on the platforms' use of "most-favored-nation" requirements. These clauses effectively forced restaurants to offer consumers prices, minimum order amounts, and promotional terms that were at least as favorable as those available on any competing delivery application.[2][3]

According to the Korea Fair Trade Commission, Coupang began imposing these requirements on its partner restaurants in July 2023, maintaining the policy through January 2026. The company tied compliance directly to its premium membership ecosystem, specifically targeting merchants seeking to maintain their status as "WOW stores."[2][3]

The WOW store designation allows restaurants to offer free delivery benefits to subscribers of Coupang's paid WOW membership. To keep this status, merchants had to meet strict conditions covering menu prices, customer delivery fees, discount rates, and even the number of menu items offered.[2]

The enforcement proved highly effective at changing merchant behavior. The regulator noted that the proportion of WOW stores meeting Coupang's strict parity conditions rose dramatically, climbing from approximately 13 percent in July 2023 to nearly 94 percent by October 2025.[1]

Woowa Brothers implemented similar most-favored-nation clauses on the Baemin platform starting in May 2024. Non-compliant entrants faced exclusion from the Baemin Club, the platform's equivalent membership program that provides crucial visibility and delivery benefits to participating restaurants.[3]

The Threat of Exclusion

The Korea Fair Trade Commission argued that these synchronized pricing demands severely distorted market competition. By threatening to exclude non-compliant businesses from free delivery benefit programs, the platforms effectively blocked restaurants from establishing more favorable conditions on rival applications.[3]

The Korea Fair Trade Commission stated in its ruling that synchronized price increases across delivery applications harmed consumer interests. The regulator concluded that the practices fundamentally weakened competition within the broader delivery sector by blocking new entrants.[3]

Rather than fostering a competitive environment where platforms might lower commissions to secure better prices for consumers, the requirements had the opposite effect. Restaurants were forced to raise their prices across all platforms to match the economics of the most expensive service they used.[3]

The investigation into these practices began in July 2024, following mounting reports from the National Assembly and local media regarding unfair trade practices. A dedicated task force within the antitrust regulator, established in May 2025, subsequently accelerated the probe into the delivery sector.[3]

Algorithm Adjustments and Advertising

Beyond the pricing clauses, Woowa Brothers faced additional penalties for manipulating its platform architecture. As of 2025, Baemin held a commanding 58.45 percent share of the market based on order volume, while Coupang Eats controlled 34.44 percent.[3]

From August 2023, Baemin deliberately reduced the visibility of store-arranged delivery options on its application. The company discontinued its fixed-rate advertising product to push merchants toward its in-house delivery service, which carries higher commission rates for the platform.[3]

A Korea Fair Trade Commission official noted that higher commissions forced entrants to raise minimum order amounts or menu prices. The regulator allocated 155.4 billion won of Baemin's total fine specifically to this abuse of market dominance.[3]

Woowa Brothers was also penalized for deceptive display practices regarding delivery speeds. Starting in April 2023, Baemin displayed longer estimated delivery times for store-arranged deliveries compared to its self-delivery service, without adequately disclosing how those estimates were calculated.[3]

The platform based the store delivery estimates on self-reported times from merchants, which tend to be overestimated to avoid customer complaints. In reality, actual store delivery times were 1.4 minutes faster than the platform's self-delivery service. This specific advertising violation resulted in a 15.4 billion won fine.[3]

Disputing the Penalty Calculation

Coupang immediately pushed back against the regulatory decision, announcing its intention to take legal action against the 300.8 billion won penalty. The company argued that the fine is fundamentally against equity and disproportionate to historical precedents in the sector.[4]

The company was referencing a 2020 regulatory case involving the rival delivery application Yogiyo. Coupang said in a statement on Monday that the new penalty, which is more than 600 times larger than similar delivery app cases in the past, is against equity.[4]

Coupang's primary dispute centers on how the antitrust regulator calculated the massive penalty. The company explained that a review report received in October of the previous year had initially estimated the penalty at between 25 billion and 42 billion won, based strictly on sales related to the charges.[4]

The Korea Fair Trade Commission subsequently increased the fine by expanding its calculation standard to encompass total delivery sales. Coupang argued this broader metric unfairly includes revenue from companies that never changed their transaction terms or never interacted with the platform regarding the clauses.[4]

"It includes sales of companies that have not changed the actual terms of the transaction or have not even contacted us," Coupang stated, characterizing the regulator's decision to change the calculation standard as an extremely unusual administrative move.[4]

AI

The Defense of Premium Programs

Coupang also defended the underlying mechanics of its WOW store system, arguing that the program was designed to support both merchants and buyers. The company framed the initiative as a necessary intervention in a challenging economic environment.[4]

"The WOW store promotion is a policy that allows restaurant owners to voluntarily set reasonable prices and helps increase sales by providing free delivery support, but the FTC judged it illegal," Coupang stated, adding that it would fully clarify its position through due legal procedures.[4]

The antitrust regulator justified the heavy penalties by pointing to the duration of the infractions. The commission noted that Coupang's violation period lasted approximately 31 months, which was significantly longer than Baemin's 17-month enforcement window.[4]

Furthermore, Coupang saw its calculated fines increased by 20 percent due to a past history of legal violations. In contrast, Woowa Brothers received a 20 percent reduction in its penalty assessment because the company cooperated with the regulatory investigation.[4]

A Broader Regulatory Crackdown

The massive fines mark the culmination of a lengthy administrative process. In April, both Coupang Eats and Baemin had attempted to avoid formal sanctions by applying for a consent decision—a settlement process where companies propose self-correction and mutual growth measures.[3]

The Korea Fair Trade Commission ultimately rejected those applications. Regulators determined that the platforms had failed to present concrete or sufficient corrective measures during the half-year negotiation period, prompting the shift toward formal financial sanctions and corrective orders.[3]

The ruling represents a landmark moment in South Korea's regulation of digital platform monopolies. By targeting the specific mechanisms that platforms use to lock in pricing parity, the antitrust watchdog is attempting to force a structural reset in how delivery economics function.[1][2]

Both companies now face a mandated overhaul of their merchant agreements alongside the financial penalties. As Coupang prepares to challenge the decision in the Seoul High Court, the immediate impact on restaurant margins and consumer delivery fees remains an open question for the industry.[2][4]