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Coupang faces probe over 'kidnapping ads'
A Coupang delivery truck idles at the comapny's logistics warehouse in Seoul, May 7. Yonhap
By Ko Dong-hwan
E-commerce giant Coupang is under government investigation for its online ad practices, which have been characterized as "kidnapping ads" that automatically direct users to Coupang's app or website without consent, according to the Korea Communications Commission (KCC) on Friday.
The authority has launched an investigation over the company's ad practices, which direct the user to Coupang's app or website when a person visits certain websites or social media pages. The practice does not require clicking a banner or a link button, causing users to complain about the redirection without even knowing of an ad's existence.
The KCC said it has been conducting a preliminary investigation since last November, focusing on how the ads appear online and the contract details behind the ads.
Authorities suspect the company has violated the country's Telecommunications Business Act by either deliberate neglect or deliberate execution, the KCC said.
The KCC is conducting a fact-finding investigation, which is launched when a regulatory breach is deemed likely. If violations are confirmed, the commission can impose corrective orders or fines.
Coupang said it has taken strict measures against fraudulent ads by malicious advertisers. It noted that previous investigations by other authorities found no issues, but that it will fully cooperate with the KCC's investigation.
The KCC has also begun investigating Coupang for regulations that do not allow consumers with accounts to cancel membership in the company's online food delivery platform, Coupang Eats, or its online streaming channel, Coupang Play.
The company explained that the "integrated" accounts work across all Coupang platforms and cannot be canceled unless a consumer chooses to not use the entirety of Coupang's services.
The KCC said this limits customers' right to cancel e-commerce platform accounts, which is also in violation of the Telecommunications Business Act.
If charges are confirmed, Coupang will be punished with a fine or other legal measures.