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| Coupang founder and CEO Kim Bom-suk. |
By Kim Hyun-bin
The country's top anti-trust regulator is continuing to investigate into Coupang, the country's leading e-commerce operator for alleged unfair actions against its suppliers, officials said Monday.
Last year, the Korea Fair Trade Commission (KFTC) received four reports of abuse from suppliers against Coupang ― two were withdrawn while the remaining two, from LG Household & Health Care and Cleanwrap, are still unresolved.
The commission said it is investigating the allegations and collecting evidence. If Coupang is found to have violated KFTC regulations, the regulator could impose heavy fines or refer the case to the prosecution for further action.
Woowa Brothers was the first to report Coupang's alleged abuse of power to the commission in May last year, followed by WeMakePrice and LG Household & Health Care in June, and Cleanwrap in August.
Woowa Brothers and WeMakePrice both withdrew their case after mediation. Some industry watchers believe Coupang made some "under the table deals" with the businesses. However, the other two firms did not withdraw their complaints. LG Houshold & Health Care has accused the e-commerce company of unfair cancellations of orders, and Clean Wrap has complained of abrupt trade suspensions.
Coupang has been embroiled in other unethical business practices in the past. In 2018, it was fined 21 million won ($16,425) for wrongfully returning ordered products to vendors.
At the time, Coupang bought 499 products from six vendors worth 20 million won, but abruptly returned the products citing order mistakes and changes in its purchase system, which the regulator deemed were made for the company's convenience.
The KFTC originally imposed a 90 million won fine, but cut it to 21 million won, factoring Coupang's growing deficit. The firm reported a 1.97 trillion won operating loss for 2018.
Given the surge in sales as more consumers purchase daily necessitates online using Coupang's channels amid the COVID-19 pandemic, the KFTC is likely to impose penalties. In February this year alone, Coupang generated 1.63 trillion won in sales, a jump of 140 percent, year-on-year.
