FTC chief suggests possible business suspension for Coupang

(Yonhap)

Ju Biung-ghi, chairman of South Korea’s Fair Trade Commission (FTC), hinted at a possible business suspension for Coupang Inc. following its massive personal data breach incident.

“A joint public-private investigation team involving the Ministry of Science and ICT and the Personal Information Protection Commission is currently conducting an investigation,” Ju said, in an interview on a YouTube channel. “After identifying the potential damage to consumers caused by the data leak, we will issue orders on what measures Coupang must take to provide relief.”

Ju emphasized that “if those orders are not implemented or if consumer damage is deemed insufficiently remedied, a business suspension is also possible.”

Ju also warned of tough sanctions on other issues.

“We also view Coupang’s practice of passing on losses incurred during lowest-price sales to suppliers as a serious unfair trade practice,” Ju said. “The results of the relevant review will be announced soon.”

In particular, he criticized Coupang’s practice of shifting losses to marketplace sellers when profits fall short of its targets, calling it a “predatory business practice.”

He also noted that investigations are underway into allegations that Coupang exaggerated or deceptively advertised discount benefits for Wow Membership subscribers, and that it forced delivery-app merchants to grant it most-favored-business status.

Depending on the investigation results, fines ranging from tens of billions to hundreds of billions of won could be imposed, observers said, and the outcome could affect Coupang’s overall business model.

Regarding whether Coupang Founder Bom Kim, who effectively controls the company, could be designated as the controlling shareholder, Ju said that “we plan to closely examine whether Kim or his family members are involved in management.”

If Kim himself or his relatives are found to be participating in management, the FTC could change Coupang’s designated controlling shareholder from the corporate entity to Kim personally, observers said.

Kim, a U.S. citizen, has so far avoided being designated as the controlling shareholder on the grounds that his family members do not participate in management.

Meanwhile, Trade Minister Yeo Han-koo, who is visiting the United States, said on Sunday, local time, that the Coupang data breach case should be handled separately from trade or diplomatic issues.

He emphasized that the Korean government is not targeting or discriminating against a specific U.S. company, namely Coupang.