Prosecutors have indicted South Korea's two largest accommodation booking platforms, Yanolja and GoodChoice, on charges of violating fair trade laws and harming small lodging partners.
The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (led by Na Hee-seok) said on the 20th that it had indicted Yanolja and GoodChoice without detention. Shim Myung-seop, the former CEO and founder of GoodChoice, was also charged.
The two companies, ranked first and second in South Korea's lodging reservation platform market, are accused of abusing their superior bargaining position by allowing unused discount coupons—bundled into advertising products sold to partner lodgings—to expire without refunds, in violation of fair trade laws.
Between 2018 and 2024, GoodChoice abused its bargaining position over partner motels and other affiliates, arbitrarily voiding 35.9 billion won worth of unused discount coupons. Yanolja eliminated 1.2 billion won worth of remaining coupons between February 2017 and May of last year.
Yanolja voided all unused coupons once the one-month contract period ended, while GoodChoice set the validity of issued coupons at just "one day," causing coupons unused that day to expire, the investigation found. The companies exploited lodging operators' heavy reliance on their platforms—86% of small and mid-sized lodgings are listed on GoodChoice and 95% on Yanolja.
Prosecutors identified former CEO Shim as the ultimate party responsible at GoodChoice, having designed and approved the coupon policy that inflicted losses on small business owners. Shim later sold GoodChoice to a British private equity fund for 300 billion won.
In January, the Ministry of SMEs and Startups uncovered the unfair trade practices by Yanolja and GoodChoice and asked the Fair Trade Commission to file a criminal complaint. Prosecutors then launched a full-scale investigation in March, raiding the two companies.
"This case is a crime of online platform bullying against thousands of small business owners," prosecutors said. "It demonstrates that effective criminal sanctions against the abuse of bargaining position are essential to establishing fair market order."
