Input 2020.12.28 12:01
“The FTC made a bad precedent… It became a country with high uncertainty”
In response to the Fair Trade Commission’s conditional approval of German Delivery Hero (DH)’s acquisition of’Baedal People’s (Baemin)’, the startup industry responded that “it will bring a serious contraction in domestic investment.” The Fair Trade Commission announced on the 28th that “when DH takes over the’elegant brothers’ operated by Baemin, it has made a decision to sell DH’s subsidiary’Yogiyo’.” As it prevents competition from being restricted, it has maintained its existing position, which virtually disallows the merger between Bae Min and Yogiyo.
The Korea Startup Forum (Cospo), a domestic startup organization, also said in a statement, “This decision is a judgment that goes against the era of ignoring the dynamics of the digital economy.” Cospo said, “Based on the network effect, platform operators have turned away from the situation in which they can enter the food delivery market as much as they can,” and said, “Open commerce companies have entered the food delivery market and online video service market one after another, and online video service providers “The current status of the digital economy is that the company enters the live commerce market, distributors enter the logistics industry, and portal operators expand various businesses.”
Cospo said, “The combination of elegant brothers, a representative unicorn company in Korea, and DH, a global company, was the largest startup M&A in Korea and an important milestone for global advancement.” However, the decision of the Fair Trade Commission adversely affected the global value evaluation of our startups. It not only caused a lot of damage, but also caused huge losses in the global market.” He said, “I hope you will recognize heavily that both the process and the result of this decision hinder innovative growth and shed a dark shadow on the future of domestic startups.”
Prior to the announcement of this final conclusion, the startup industry had already expressed strong concern over the FTC’s policy of’conditional approval’. Cospo also issued a statement last month, saying, “It is a judgment that neglects the dynamics of the digital economy and puts an end to the domestic startup ecosystem,” and said, “We ask for a reconsideration of our judgment, hoping not to commit irreversible misfortunes in the future.”
“The most important thing for the virtuous cycle of the domestic startup ecosystem is the exit (exit strategy such as sale), and in order for startups to grow beyond the domestic market, strategic cooperation with global companies is important.” “Baemin and DH The company’s merger review was delayed for more than a year, and a negative signal to add’Korea Discount’ was delivered in the global investment market.” The first news of DH’s acquisition of Baemin was in December of last year, but the M&A (acquisition/merger) process has been’all-stop’ so far.
Cospo argues that the food delivery market should be viewed broadly as a global market rather than confined to the domestic market. The world’s largest retailer Amazon makes a large-scale investment in the food delivery platform’Deliveru’, and China’s largest online shopping platform Alibaba also acquires China’s No. 1 food delivery platform’Erumer’. Is.
However, the FTC decided that DH could not approve the merger as it is, as Yogiyo and Delivery Pass, which was previously operated by DH, and Baemin, the target of this acquisition, had a share of 99% of domestic delivery apps. With this, Cospo said, “Compared to a year ago when the merger and acquisition between Baemin and DH was announced, the domestic delivery market is quite different.” “A strong new business operator has appeared, and an open market operator, not a delivery app company, is a delivery app. It is jumping into the market. The decision of the Fair Trade Commission does not take into account the characteristics of the digital economy, where the boundaries between countries and industries are collapsing.”
Attorney Tae-Eon Koo, a representative activist of the civic group’Regulatory Reform Dignity’ with the motto of regulatory innovation, said, “If you look broadly, you can see fresh food delivery such as Coupang, Market Kurly, E-Mart early morning delivery as a food delivery market.” It is not something to be seen narrowly as a food market.” He said, “It was a result of the FTC trying to regulate the digital industry from an analog perspective.”
Attorney Tae-Eon Koo said, “The deal (deal) between DH and Min Bae was an unbelievable achievement as a result of a young Korean named Kim Bong-jin in 7 years. This decision by the FTC created a bad precedent, and from the standpoint of global investors, Korea is investing. It has become a reluctant, uncertain country.”