No meddling in the mergerThe Euljiro Committee under the ruling Democratic Party — designed to work for the rights of the weak — is out to meddle with in corporate mergers and acquisitions (M&A) deal by expressing its disapproval of the $4 billion offer by Delivery Hero to take over Woowa Brothers, the owner of the Baedal Minjok delivery app. The deal is seen as creating a monopoly in the Korean food delivery market, as the German company already owns No. 2 and 3 Yogiyo and Baedaltong. Even if there are concerns in the market, politics should not have a say in corporate M&A deals.
Merchants fear a spike in delivery costs under a monopoly over 90 percent of the food delivery app market. There are also concerns about worsening labor conditions for the deliverers and collusive charges if the three apps are consolidated under one roof.
There is a legitimate antitrust agency that reviews such negative effects in approving corporate M&A deals. The Fair Trade Commission (FTC) takes into account the impact on competition and the economy when evaluating corporate mergers. The review on a food app is complex as it is part of the new big data industry. Kim Bong-jin, head of Woowa Brothers, said that local food app platform cannot last beyond three to four years if it does not join up with foreign capital. It must move beyond the local market for long-term survival. Kim will supervise operations in 11 Asian markets after his company joins the Delivery Hero family.
The FTC approved the mergers of SK Broadband and t-broad and another between LG U+ and CJ HelloVision despite antitrust issues because of the need for local pay TVs to bulk up to confront increasing challenges from foreign players and changes in the technology landscape.
The Euljiro Committee has been behind the revised passenger transportation act, which more or less outlaws the Tada van-hailing service. Politics must not get in the way of future mobility, food delivery apps and new platform businesses because of their impact on the traditional business players. It must leave the issue to the FTC.
JoongAng Ilbo, Jan. 6, Page 30