Delivery App Fee Cap Gains Ground as Minister Nominee Backs Platform Rules

As the National Assembly, led by the ruling party, pushes to cap delivery app fees, Lee So-young, nominee for minister of SMEs and startups, said regulating private platforms is a valid approach. With President Lee Jae-myung also instructing relevant ministries to address the market's monopoly/oligopoly structure, industry concerns are mounting.

At a confirmation hearing at the National Assembly on the 15th, the nominee was asked about mounting difficulties for small business owners and the self-employed caused by delivery app monopoly/oligopoly and high fees. "I think many are suffering not only from Coupang but also from open market fees and delivery app fees," she said. Asked about regulating private platforms or requiring broader disclosure through an online platform law or amendments proposed by her ministry, she said it "would be a valid approach."

Three bills on capping delivery app fees are pending before the National Assembly's National Policy Committee. They were introduced separately by Kim Nam-keun and Lee Kang-il of the Democratic Party and Park Jung-hoon of the People Power Party. The bills differ in detail, but their core provision would bar the combined "total fee" — brokerage fees, payment processing fees and delivery charges paid by self-employed merchants when they take orders through a delivery platform — from exceeding 15% of the transaction amount.

While lawmakers continue deliberations, the president weighed in on the fee issue last month. At a Cabinet meeting he chaired at the Blue House on the 25th of last month, President Lee said the fees that delivery platforms such as Baemin and Coupang Eats charge self-employed merchants are too high, and called for measures to break up the market's monopoly/oligopoly structure.

The industry has voiced concern over these legislative moves by the National Assembly and the government. The Korea Internet Corporations Association — whose members include major platform operators such as NAVER, Kakao, Coupang and Woowa Brothers, the operator of Baemin — opposes the legislation, saying a cap could distort the market. Some argue the costs would ultimately be passed on to consumers.

At the hearing, the nominee also signaled support for developing public delivery apps. On the budget for supporting such apps, she said, "Rather than simply handing out coupons, we will work to find a more efficient way to use the funds." She added, "Building what are called public delivery apps into attractive and competitive services could also be one approach."

Asked about the need to expand the budget for improving delivery systems for public apps, she said, "I understand the ministry requested a budget for delivery fee support, but it was not reflected in the final government proposal." She added, "If committee members take it up during the National Assembly's budget review, it could become a meaningful allocation."