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Coupang escalates tit-for-tat with antitrust watchdog

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Coupang's delivery trucks are parked in Seoul, Thursday. Yonhap

Coupang's delivery trucks are parked in Seoul, Thursday. Yonhap

Retail industry criticizes Fair Trade Commission for imposing excessive, unjust sanctions
By Lee Min-hyung

Coupang is stepping up counteractions against the nation's antitrust watchdog, in response to what experts and industry officials describe as "excessive and unjust" sanctions imposed on the leading e-commerce firm.

The reaction came in response to the Fair Trade Commission's (FTC) latest decision to levy fines of 140 billion won ($101 million) on Coupang. The fine was imposed due to allegations that the company manipulated an in-app algorithm to boost sales of products from its private brand.

Legal experts sided with Coupang, calling the regulation hasty and unfair, as it remains ambiguous whether the firm's sales practice can be seen as illegal.

"Above all, the scale of fines looks too excessive, as it is uncertain whether it has breached the law, and on top of that, the authority has yet to prove that the alleged algorithm manipulation hampered customer benefits," Choi June-sun, professor emeritus at Sungkyunkwan University Law School, said.

The fines are the highest ever imposed on a single retailer here.

The FTC cited a similar case from an overseas authority to justify its latest regulation against Coupang.

According to the watchdog, the European Union's (EU) competition authority ordered Amazon to rectify a similar sales practice in 2022.

But the expert said it is unfair to apply the case to Korea on equal terms.

"The EU has displayed a negative stance toward global big tech firms," Choi said. "It doesn't make sense for the Korean antitrust authority to follow the same path, especially since the Coupang case is not widely viewed as a clear violation of local laws."

Coupang is also adopting a firm stance, stating that its ultra-fast Rocket Delivery service will cease to be available if the company is prohibited from continuing the practice.

The retailer also expressed concerns that its mega-sized investment of 22 trillion won will not proceed as planned due to the FTC sanction.

Retail industry officials said the sanction leaves much to be desired, as Chinese e-commerce firms such as AliExpress and Temu face less stringent regulatory hurdles.

"The latest sanction may dampen investor sentiment among other domestic retailers, amid concerns that they too could face similarly severe penalties," an official at a retail company here said. "Chinese e-commerce firms have generated a number of controversies for their sales of hazardous products, but no such heavy sanctions have been imposed on them, which constitutes reverse discrimination."

Coupang is set to file an administrative litigation, and justify the legitimacy of its sales practices.

Lee Min-hyung


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