Kakao to separate shipping fees from Gift prices after 'free' deemed unfair

Home > Business > Industry

Kakao to separate shipping fees from Gift prices after 'free' deemed unfair

Published: 21 Jul. 2025, 14:16 Updated: 21 Jul. 2025, 14:39

Audio report: written by reporters, read by AI

Kakao's headquarters in Pangyo, Gyeonggi [NEWS1]

Kakao will soon list shipping fees on its popular KakaoTalk Gift service, breaking from its longstanding policy of offering "free shipping" — a system regulators say unfairly padded the platform’s profits while hitting retailers with inflated commission fees.

The shift comes as part of a corrective agreement with Korea’s Fair Trade Commission (FTC), which last week finalized a remedial proposal resolving allegations that Kakao violated the Act on Fair Transactions in Large Retail Business. Such a proposal lets investigations end without fines if the company offers a remedy the commission deems sufficient, aiming for faster implementation of corrective measures.

Until now, Kakao has required suppliers on the platform to bundle shipping costs into the listed product prices, effectively forcing all products to be marked as “free shipping.” This allowed Kakao to apply commissions not just to the item’s base price but also to the shipping cost — despite shipping being handled by the supplier, not the platform.

For example, an item that costs 7,000 won ($5) with a 3,000 won shipping fee would be listed at 10,000 won with “free shipping.” Kakao would then calculate its commission based on the full 10,000 won.

The FTC launched an investigation in December 2022, determining that Kakao’s practices were likely in violation of large-scale retail regulations. Kakao filed to provide a remedial proposal in October and November of last year.

Under the agreement, suppliers will now be able to choose whether to maintain bundled pricing with free shipping or to list product and shipping costs separately. However, the FTC said the change is unlikely to result in any added burden for consumers. The same 10,000 won product, for instance, will simply show the 7,000 won product price and a separate 3,000 won shipping fee.

Kakao has also pledged additional measures to support its suppliers, including reducing fees for electronic payment services. The company plans to provide at least 9.2 billion won in financial relief.

“The FTC considered recent trends showing that suppliers still prefer free shipping models and the fact that they joined the platform with full knowledge of the existing terms,” said the commission in its statement.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY AHN HYO-SEONG [[email protected]]