Coupang Eats Rejects FTC Recommendation to Fix Unfair Fee Practice

The Fair Trade Commission (FTC) has begun reviewing whether to issue a corrective order against Coupang Eats, after the food delivery platform refused to comply with the regulator's recommendation to fix its practice of charging fees based on pre-discount prices.

The move comes as regulatory pressure on Coupang intensifies following a massive data breach affecting 33.7 million customers, with the FTC and police stepping up scrutiny of the company. Industry observers are closely watching how the situation will affect the food delivery app market.

**Coupang Eats refuses to change pre-discount fee calculation**

According to the office of Democratic Party lawmaker Lee Kang-il and industry sources, the FTC is reviewing a corrective order against Coupang Eats. In October, the FTC pointed out that the platform's fee-related terms were unfair, specifically a clause that charges commission fees to merchants based on prices before discounts are applied.

Under this practice, merchants face a double burden of both discount costs and fees calculated on the original price. The FTC determined the clause violated the Standardized Contracts Act and recommended Coupang Eats revise or delete it within 60 days.

However, Coupang Eats effectively rejected the recommendation, maintaining that the clause does not violate the law. The Seoul Economic Daily confirmed through a merchant on the platform that Coupang Eats continues to apply the existing rules. The company reportedly intends to actively contest the FTC's interpretation.

This stands in contrast to Baedal Minjok, Korea's leading delivery app, which changed its policy in May to charge commission and payment processing fees based on post-discount prices. The FTC has now moved to the next step of reviewing a corrective order.

"This was also discussed at the Democratic Party's Euljiro Committee social dialogue body. Coupang Eats is ignoring both merchant demands and the FTC's recommendation," lawmaker Lee said. "Coupang is not following laws, regulations, social consensus, or reasonable common sense."

**Industry watches membership cancellation numbers**

The delivery app industry is paying close attention to the fact that Coupang Eats' terms have come under scrutiny while the FTC and other authorities are already investigating Coupang over the data breach affecting 33.7 million customers. With regulatory pressure at its highest level since the company's founding, any resulting measures could be severe and may lead to tighter regulations across the industry.

"Some terms and services are similarly applied across companies, so depending on the FTC investigation results, other companies may also need to take action," an industry official said. "We are closely monitoring the Coupang situation."

Whether this situation will slow Coupang Eats' rapid growth is also a key concern. Coupang has been offering various benefits through its "Wow Membership," including Rocket Delivery and free delivery on Coupang Eats. If more customers cancel their memberships due to the data breach, Coupang Eats users will inevitably decline as well. Merchants are worried about both continuing to pay fees on discount amounts and the possibility of a sharp drop in orders due to the data breach.

According to IGAWorks Mobile Index, Coupang Eats' daily active users (DAU) were estimated at 2.37 million as of December 9. This represents a 23.5% decrease from 3.1 million DAU on November 30, the first weekend after news of the data breach broke. Coupang Eats users have been declining continuously since December 6. Before the data breach, Coupang Eats had overtaken Baedal Minjok to claim the top spot in the Seoul metropolitan area.

Industry observers also note that investigations into Coupang could lead to stricter regulations across the sector. "Some terms and services are similarly applied across companies, so depending on the FTC investigation results, other companies may need to take action as well," an industry official said. "We are closely monitoring the Coupang situation."