South Korea's Fair Trade Commission has rejected all 4 requests by Baedal Minjok (Baemin) and Coupang Eats for consent decrees. The commission said on Wednesday it decided to put the cases back into the review process after concluding the corrective measures proposed by the two companies were not sufficient to open the procedure.

A consent decree allows a company accused of breaking the law to propose corrective steps, and if the commission accepts them it closes the investigation without determining whether the conduct was illegal. The rejected cases include 3 involving Baemin, covering an alleged demand for most-favoured-nation terms, preferential treatment for its own Baemin Delivery service and allegedly misleading advertising of estimated delivery times, and 1 involving Coupang Eats over an alleged demand for most-favoured-nation terms. The commission decided to reject the requests after two full-commission meetings on May 27 and June 10.

The most-favoured-nation allegations involving both companies concern claims they forced merchants to offer food prices and minimum order amounts that were not less favourable than on other delivery apps. The Baemin Delivery preference allegation concerns claims it favoured the more profitable Baemin Delivery service and disadvantaged merchant delivery to force merchants to switch. The misleading advertising allegation refers to displaying estimated times for Baemin Delivery faster than the actual times.

Baemin, when it applied last month, proposed spending 300 billion won over 3 years to cut fees for merchants using merchant delivery and expand education infrastructure. It also said it would display merchant delivery and Baemin Delivery under the same standards, and would consult the commission in advance if merchant delivery were pushed down due to consumer preferences. Coupang Eats proposed spending 60 billion won over 4 years to support merchants and set up a mutual-growth consultative body.

The commission said it judged the measures were not sufficient to open a consent-decree procedure. It also included a view to reject the requests at the stage of the investigator's action report before the full-commission meetings.

Some analysis also says the rejection was influenced by the fact that the scale of mutual-growth support funds was smaller than the combined total of fines that could be imposed if the law was found to have been violated. With Wednesday's rejection, the cases return to the review process, and the final decision will determine whether the law was violated and the level of sanctions, including fines.

Woowa Brothers, Baemin's operator, said in a statement it was disappointed that the consent-decree request, aimed at quickly restoring competitive order in the market and directly supporting small business owners, was not accepted. The company said the mutual-growth plan differs from past cases that focused on building infrastructure because it includes direct support for fees and delivery charges for small merchants. It said it would place mutual growth and shared development as the top value in management and do its best to build a delivery ecosystem in which merchants, customers and platforms grow together.