Korean antitrust regulators slap Coupang with $102 mn fine

[Photo by Yonhap]

South Korean antitrust regulators said they imposed a 140 billion won ($115 million) fine on Coupang Inc. for manipulating search results to boost sales of private label items.

The penalty is the largest ever imposed on a single retailer. The Fair Trade Commission (FTC) decided to charge the e-commerce platform with algorithm manipulation, the first time that a Korean company is facing such accusations.

Coupang announced plans to appeal the decision, describing it as “anti-innovation measures that ignore consumers’ right to choose.” The company also warned that the penalty could halt its expected 3 trillion won investment in logistics for no-charge delivery and its 22 trillion won investment in purchasing goods for what is known as rocket delivery.

The FTC accused Coupang of engaging in unfair competition with its own merchants by misleading customers into believing that its products were better without providing accurate search rankings. According to the statement released by the authority, Coupang artificially revised the results in the algorithm so that so-called PB items rank higher in search results and receive more search ranking scores.

The antitrust regulators found that at least 64,250 of Coupang’s private label products had higher search result rankings from February 2019 to July 2023.