New bills target e-commerce giants with delivery curbs, faster payment rules

A wave of legislation targeting major e-commerce platforms — from limits on overnight delivery work hours to shorter payment settlement periods — is advancing in the National Assembly, putting companies like Coupang Inc and Kurly on edge. The fallout from Coupang's refusal to allow a Korea Fair Trade Commission on-site inspection is also expected to trigger criminal charges and possible amendments to related laws.

According to industry sources and the National Assembly on Thursday, the ruling Democratic Party of Korea is actively pushing two bills introduced by Democratic Party lawmaker Park Hong-bae: an amendment to the Occupational Safety and Health Act and a revision to the Living Logistics Service Industry Development Act. Both bills center on regulating overnight and late-night delivery operations — an agenda the Democratic Party's Euljiro Committee has championed — and are expected to move quickly.

The Occupational Safety and Health Act amendment would cap daily nighttime work at 10 hours and weekly nighttime work at 48 hours. Workers could not exceed an average of eight hours per day on a one-week basis, or an average of 44 hours per week on a two-week basis. Consecutive nights of work would be limited to three, and workers would be guaranteed at least 11 consecutive hours of rest after completing a night shift.

The bill also clarifies protections and responsibilities for delivery workers. Courier operators and their branch outlets would be required to take preventive measures against health hazards arising from nighttime work, and primary courier operators would be responsible for overseeing compliance at their branches. The amendment also mandates premium pay for nighttime work.

The restrictions are expected to hit e-commerce platforms such as Coupang and Kurly, for which overnight delivery is a core business. Both companies have pushed for a 50-hour weekly limit. A third round of social dialogue on the courier industry, launched in September last year, had been discussing a 46-hour cap before settling on 48 hours — but a reduction in overnight delivery volume now appears unavoidable.

Efforts to shorten payment settlement deadlines are drawing support from both the ruling and opposition parties. Under the current Large-Scale Distribution Business Act, companies must pay suppliers within 40 days of the sales cutoff date for consignment, store lease and commission transactions, and within 60 days of product receipt for direct-purchase transactions. The large-scale retailer threshold applies to companies with annual sales of 100 billion won ($72.2 million) or more.

Most of the proposed amendments seek to cut those deadlines to 10 to 30 days for supply and consignment transactions, and to 20 to 40 days for direct purchases. Seventeen such bills were introduced in the 22nd National Assembly, with 12 filed this year alone. Separate bills — sponsored by lawmakers Yoon Young-seok, Kang Min-guk and Kim Dong-a — would bring online platforms under the definition of large-scale retailers. Momentum behind the legislation has grown following the Tmon-WeMakePrice settlement crisis and the prolonged fallout from the Homeplus situation.

A Fair Trade Commission survey of payment practices at major retailers, released in December last year, found that companies engaged in direct-purchase transactions took an average of more than 50 days after receiving goods to make payment. Average payment periods by company were 52.3 days for Coupang, 54.6 days for Kurly and 59.1 days for Daiso. Industry officials have raised concerns that a sharp tightening of payment deadlines could disrupt companies' cash-flow management plans.

Meanwhile, the Fair Trade Commission has Coupang squarely in its sights. Fair Trade Commission Chairman Ju Byung-gi said Wednesday at a comprehensive policy hearing of the National Assembly's Budget and Accounts Committee that the commission would pursue criminal charges over Coupang's refusal to allow an on-site inspection related to allegations of gapjil against suppliers. There are also indications that the commission is considering amending the Administrative Investigations Act to allow unannounced on-site inspections, removing the current requirement under that law to give seven days' advance notice — the provision Coupang cited as grounds for refusing the inspection.

"The nighttime work regulations are tied up with the hypermarket issue over whether to allow overnight delivery, so we'll have to wait and see how that plays out," one industry official said. "On top of the shorter direct-purchase settlement deadlines, there's a push to amend the Win-Win Cooperation Act to let the Ministry of SMEs and Startups conduct fact-finding surveys on platform fees and settlement periods — the overall regulatory environment is tightening on all fronts."