South Korea's Fair Trade Commission may suspend Coupang's business operations if the e-commerce giant fails to comply with corrective orders or adequately compensate consumers affected by a massive data breach. FTC Chairman Ju Byung-gi issued the warning Monday during a radio interview and YouTube appearance, signaling escalating regulatory pressure on the New York-listed company.
The threat follows Coupang's December 25 internal probe disclosure that a former employee stole personal information from 33.7 million user accounts. The company claimed only about 3,000 accounts had data saved, which was later deleted. South Korea's science ministry dismissed these findings as one-sided and incomplete, noting a joint public-private investigation with the Personal Information Protection Commission remains ongoing.
FTC Chairman Ju stated the commission will issue corrective orders after estimating consumer damages from the data leak and determining appropriate compensation amounts. "If an order is not implemented or if it is deemed insufficient to provide relief to affected consumers, a business suspension is also possible," Ju said during his radio interview Monday.
Beyond the data breach, the FTC is investigating multiple allegations against Coupang. These include predatory pricing practices where the company allegedly passed losses from low-price sales to partner suppliers. The commission has concluded deliberations on this practice, calling it "extremely unfair" and a "predatory business practice."
The FTC is also examining deceptive advertising surrounding Coupang's Wow Membership program, which reportedly advertised discount prices as continuously applied despite being one-time offers. Additionally, the commission is reviewing whether Coupang bundled its paid membership services and demanded most-favored treatment from merchants on its food delivery platform.
Separately, the FTC is investigating allegations that Coupang unfairly charged advertising fees to third-party sellers and is reviewing possible sanctions. According to FTC data, Coupang received approximately 2.34 trillion won ($1.6 billion) from third-party sellers in 2024 through advertising and promotional fees, discount coupons, and sales incentives, representing about 9.5 percent of its total direct-purchase transactions.
Coupang faces scrutiny from multiple government agencies beyond the FTC. The Financial Supervisory Service launched an official audit of Coupang Financial over high-interest loan products charging up to 18.9 percent annually on loans up to 50 million won. The National Tax Service initiated a special audit in December investigating potential tax evasion and unfair profit transfers to Coupang's U.S. parent company.
Police summoned Harold Rogers, Coupang's interim CEO, for questioning Monday as part of an investigation into the company's alleged wrongdoing. This marked Rogers' second summons after he failed to comply with an initial request to appear. The Seoul Metropolitan Police Agency established a special task force earlier this month to coordinate the investigation.
Coupang also faces a pending Supreme Court case over the FTC's 2021 order requiring corrective measures and imposing a 3.3 billion won fine for shifting promotional costs onto suppliers and pressuring them to raise prices on competing platforms. The company's regulatory challenges have revived calls for South Korea's controversial Online Platform Act, which seeks to regulate large digital platforms for fair competition and consumer protection.
The Ministry of Employment and Labor has pledged to investigate Coupang over suspected violations of labor and industrial accident laws, including reports of illegal worker dispatch and programs targeting dismissal of low-performing employees. The Ministry of Science and ICT is focusing on security flaws that enabled the data breach, while the Personal Information Protection Commission examines potential violations of the Personal Information Protection Act.
FTC Chairman Ju noted the commission periodically reviews Coupang's ultimate beneficiary designation and plans to examine whether Chairman Kim Bom-suk's family is involved in management. If family members participate in management, the ultimate beneficiary could change from the corporate entity "Coupang Corporation" to Kim as an individual.
The regulatory assault marks a significant escalation for Coupang, which grew to become South Korea's largest e-commerce platform amid what consumer economics professor Choi Chul described as "insufficient legal framework to regulate online distributors." The company's expansion into over-the-top services, food delivery, and financial services through its Wow membership subscription has drawn increased regulatory attention across multiple sectors.
