Lee Says Delivery Apps a Virtual Monopoly, Urges Stronger Public Rivals

President Lee Jae-myung on the 25th called for measures to break up the dominance of food delivery platforms, addressing the burden that delivery commissions place on self-employed business owners. Diagnosing the delivery app market as effectively a near-monopoly, he said the government should not rely on Fair Trade Commission regulation to tackle high fees, but should instead grow public delivery apps and, over the long term, consolidate the more competitive ones.

At a Cabinet meeting held at the Blue House that day, President Lee said, "There are complaints that delivery app fees are too high," adding, "We need to create at least a system of genuine competition, but I judge that this is effectively a monopoly." When Nam Dong-il, vice chairman of the Fair Trade Commission, described the process by which delivery platforms had absorbed and merged rivals and said "the near-monopoly system has become entrenched," President Lee added, "In practice, it is a state of strong oligopoly." He then stressed, "As a result, there are growing grievances that the delivery-fee burden on self-employed business owners keeps rising," and, "The ministries need to examine what measures can be taken to secure genuine competition."

Lee Byung-kwon, vice minister of SMEs and Startups, reported a plan to intensively foster public delivery apps using next year's budget. The vice minister said, "Delivery platforms by their nature have a near-monopoly character," and, "We are planning a support program to raise the market share of public delivery apps to 15 to 20 percent by backing apps that serve the public interest."

There are currently about 12 public delivery apps operated or supported by local governments nationwide. The government is considering a plan to concentrate marketing costs and other support on around three of them that have performed relatively well. The aim is to pick platforms with proven competitiveness and scale them up, rather than supporting every public delivery app across the board.

On such support measures, President Lee added, "Providing funding is also necessary, but what matters more is integrating their management," saying, "Please focus on tying the operations together as a whole and, by providing support permitted under the law or international trade rules, making them genuinely able to compete."