Editorials
Don't weaken competition principles to boost small businesses' bargaining power
Korea’s push to let small businesses bargain collectively against large firms aims to curb unfair pressure but raises concerns about higher prices and weaker competition.
Members of the Riders' Union branch and the Cargo Truckers Solidarity Division under the Korean Confederation of Trade Unions' Public Transport Workers' Union chant slogans outside the Ministry of Employment and Labor in the government complex Sejong on April 28. They called for the introduction of a minimum per-delivery wage and legal recognition of dependent contractors and platform workers as employees entitled to labor protections.
YONHAP
The government plans to allow small business owners and small- and medium-sized enterprises (SMEs) to engage in collective bargaining and collective action against large corporations and mid-sized firms. The Korea Fair Trade Commission (KFTC) recently reported to the Cabinet a package of institutional reforms aimed at strengthening the bargaining power of economically weaker businesses.
If the proposal becomes law, restaurant owners using food delivery platforms could jointly demand lower commission fees, while subcontractors could collectively refuse deliveries in response to large companies' attempts to cut procurement prices. The KFTC also plans to exempt collective action by dependent contractors, such as delivery riders and truck owner-operators who are legally self-employed but work much like employees, from the Fair Trade Act. The move represents a clear break from the commission's previous practice of treating such organizations as business associations subject to antitrust sanctions.
The KFTC first announced in December of last year that it would review measures to guarantee collective action rights for economically disadvantaged businesses. In April, President Lee Jae Myung said during a meeting with the Korean Confederation of Trade Unions that small business owners should be allowed to bargain collectively and guaranteed at least a basic right to organize.
Within two months, the ruling party introduced amendments to the Framework Act on Small and Medium Enterprises to grant collective bargaining rights to small business owners. The KFTC pledged to revise the Fair Trade Act to exempt them from antitrust provisions, while the Ministry of SMEs and Startups proposed amending the Small and Medium Enterprise Cooperatives Act to give SME cooperatives the right to request formal consultations.
Helping smaller businesses negotiate on more equal footing with dominant online platforms and large corporate customers is a legitimate policy goal. The growing influence of digital platforms and the imbalance of power in supply chains have made fairer bargaining conditions an increasingly important issue.
Even so, worthy intentions should not undermine the KFTC's fundamental mission of protecting competition. Although the commission says it could prohibit collective action if consumer interests are seriously harmed, there is no guarantee that stronger bargaining power will not eventually lead to higher supply prices and increased costs for consumers.
Nor should expanded collective bargaining rights trigger a flood of demands from organizations lacking genuine representativeness, creating another politically divisive dispute similar to the "Yellow Envelope" law. Protecting weaker market participants is an important policy objective, but it should not come at the expense of competition, consumer welfare or the principles of a market economy.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
