Republic of Korea: Fair Trade Commission fined Digit Mobility KRW 228 million for their franchise fee collection practices

On 16 January 2025, the Fair Trade Commission (FTC) of the Republic of Korea issued a corrective order and imposed a fine of KRW 228 million on Digit Mobility, the Daegu·Gyeongbuk regional headquarters of the KakaoT Blue taxi franchise, for unfairly collecting franchise fees from taxi drivers. The FTC found that Digit Mobility had been charging a 20% franchise fee on total fares, including dispatch platform usage fees, even when drivers did not use the KakaoT app. This practice, which applied to approximately 28.5% of trips from January 2020 to September 2023, violated the Franchise Business Act by imposing unfair contract terms on franchise partners. The corrective order aims to establish fair trade practices in the franchise market and reduce the financial burden on taxi drivers by ensuring fees are not collected for non-franchise activities.