- Public consultation period from March 11 for 30 days before finalizing the resolution -
The Korea Fair Trade Commission (Chairman Han Ki-jeong, hereinafter referred to as "KFTC") has prepared a provisional consent resolution regarding Kakao Corp.'s alleged violations of the Large-scale Distribution Business Act. From March 11 to April 9, 2025, KFTC will collect opinions from relevant ministries and stakeholders.
* The alleged violations involve Kakao’s online shopping platform, Kakao Gift, specifically:
① Forcing suppliers to use only the free shipping method, which includes delivery costs in the product price and is subject to commission fees, without allowing them to choose their preferred shipping method.
② Delaying the issuance of written contracts to suppliers.
③ Returning products without justifiable reasons.
📌 General Explanation of Shipping Fee Structures:
- Paid Shipping: The consumer sees the product price and shipping fee separately on the purchase screen.
- Free Shipping (shipping cost included): The total price displayed includes the shipping cost, with no separate breakdown.
Kakao applied for a consent resolution process on October 31, 2024, in response to KFTC's ongoing investigation into these alleged violations. Subsequently, on January 10, 2025, KFTC decided through a subcommittee meeting to initiate the consent resolution process.
Key Provisions of the Provisional Consent Resolution
1️⃣ Granting suppliers the right to choose the shipping method
- Suppliers will be allowed to decide whether to include delivery costs in the product price based on their business judgment.
- Previously, they were forced to adopt the free shipping model (where the sales commission was calculated based on the total product price, including delivery costs).
- Under the new proposal, suppliers can choose to set product prices and shipping fees separately, with commissions applied only to the product price.
2️⃣ Compliance and Fair Trade Education for Kakao Employees
- Kakao will implement Fair Trade Act education for employees handling supplier-related tasks.
- The company will introduce a Compliance Program (CP) to ensure adherence to fair trade practices.
- A policy prohibiting differential treatment of suppliers based on shipping methods will be enforced.
- Kakao will also improve the user interface (UI) to enhance consumer protection.
3️⃣ Reducing Supplier Costs and Expanding Marketing Support
- Kakao has proposed various cost reduction measures to alleviate the financial burden on suppliers:
✔ Lowering payment gateway (PG) fees
✔ Maintaining current commission rates for consignment sales
✔ Exempting delivery costs from commission calculations - Marketing support measures include:
✔ Discount marketing campaigns with compensation for discounts
✔ Providing free advertising credits
✔ Offering customized consulting and marketing training
✔ Hosting promotional events - Kakao plans to allocate at least 9.2 billion KRW (approx. $6.9 million) to implement these measures as part of the consent resolution.
Next Steps: Public Consultation and Final Decision
📢 From March 11, 2025, KFTC will collect opinions from stakeholders and relevant ministries (including the Ministry of Trade, Industry, and Energy, the Ministry of SMEs and Startups, and the Ministry of Justice) for 30 days.
- The provisional consent resolution will be publicly available on KFTC's website (www.ftc.go.kr → News & Announcements → Notices).
- Any interested party can submit their opinions.
Once the public consultation period ends, KFTC will review the collected opinions and finalize the consent resolution through a deliberation and decision-making process.