Coupang Criminally Investigated for Violations of Fair Trade Law

A lengthy investigation of Coupang is nearing a conclusion. The Seoul Eastern Division Prosecutor’s Office is investigating Chairman Kim Beom-seok (founder) and CEO Kang Han-seung (retired judge). Coupang has, also, over the past few years had numerous labor complaints from domestic and expat workers. Coupang is a Deleware company that primarily does business in Korea. It is one of the most successful, recent, startup stories in Korea.

Presently, the Korean Prosecution Service is reviewing whether it can hold Coupang’s executives, including Chairman Kim Beom-seok and CEO Kang Han-seung, responsible for violations of competition laws. Coupang is accused of manipulating the search algorithm to increase the exposure of Coupang’s private brand (PB) products. The Korean Prosecution is, seemingly, looking to find evidence that senior management and the Chairman and CEO had knowledge and/or directed the creation of an alleged manipulative algorithm and/or the plan to manipulate search results.

It has been reported in local Korean media sources that the Korean prosecution is known to have questioned employees and former employees on seized internal documents on the criteria for displaying certain products at the top of results.

According to Law Times, “Coupang is accused of manipulating its algorithms to unfairly raise the search rankings of about 60,000 of its own products, including PB products and directly purchased products. It is also alleged that it mobilized about 2,000 employees to write at least 70,000 reviews for PB products. Coupang is alleged to have intentionally limited the exposure of intermediary products sold by more than 200,000 merchants by giving high ratings to PB products in order to maximize its own profits. The Fair Trade Commission judged that Coupang had artificially placed certain products at the top by exploiting the fact that high exposure in search results has a significant impact on sales, and reported it to the prosecution.

According to the Fair Trade Commission’s investigation, Coupang was found to have actively lured consumers by displaying products such as products from competing businesses at the top of its Rocket Delivery service, products with slow sales, and products that were to receive rebates at the top without informing them of this manipulation. The Fair Trade Commission judged that Coupang’s actions were illegal and deceptive to consumers and imposed a fine of 140 billion won. At the time, the Fair Trade Commission explained that Coupang’s illegal activities continued from early 2019 to July 2023. However, it was found that Coupang has hardly changed its problematic product listing method and employee review policy since then. Accordingly, the Fair Trade Commission imposed an additional fine of 22.8 billion won on sales from August 2023 to June 2024.” Law Times, Coupang Investigation Concludes (Feb. 19, 2025).

Coupang claims that “PB products and other products are highly preferred by consumers, which is why they were ranked higher,” and that “it is not algorithm manipulation.” It also claims that employees’ reviews are “part of normal marketing activities.”

We shall update the reader when more information is known. For full disclosure, we have been retained for cases in which Coupang was the defendant.

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only a few non-Korean lawyers as a Top Attorney by AsiaLaw, and IPG Legal is consistently ranked Top Dispute Resolution Law Firm for our litigation services and IPG Legal is consistently rated a top-tier law firm in corporate law, litigation, franchise law, estate law, family law, employment & labor law, and criminal defense law.

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