Prosecutors raid Coupang headquarters for promoting private brands

Prosecutors raided Coupang's headquarters amid allegations of manipulating search algorithms to favor its private label products.

Coupang's delivery truck is parked in a parking lot in Jung District, central Seoul, in August. [NEWS1]

Prosecutors raided Coupang's headquarters in Songpa District, southern Seoul, on Tuesday over modifying search algorithms in favor of the products of its private labels.

The search and seizure operation began Monday, according to multiple media reports. It's the first time the prosecutor has raided a Korean firm over algorithm manipulation.

Korea's Fair Trade Commission (FTC), in June, slapped the e-commerce giant with a 163 billion won ($116 million) fine for actively influencing its search system so that around 60,000 so-called private brand (PB) products like tissues and food would appear at the top of search results.

PB products are items independently produced by large retailers, which are typically sold at lower prices than other brands on the market.

The e-commerce giant also faces an allegation of mobilizing some 2,000 employees to leave good reviews on those specific products.

Coupang, in September, filed an appeal against the FTC's ruling.

BY SARAH CHEA [chea.sarah@joongang.co.kr]