Diplomatic, trade burdens intensify as Coupang founder designated de facto controller

Delivery trucks are parked at a Coupang logistics center in Seoul's Seocho District, Wednesday, when the Fair Trade Commission designated the firm's Korean American founder Kim Bom-suk the company’s controlling figure. Yonhap

E-commerce giant Coupang is adding strain to Korea’s diplomatic and trade relations with the United States after its Korean American founder, Kim Bom-suk, was named the company’s legal controlling figure by Seoul’s antitrust watchdog, Wednesday.

Kim’s inclusion on the Fair Trade Commission’s (FSC) list places him under more regulatory scrutiny, which analysts say could intensify debate over what some U.S. lawmakers have alleged amounts to “discriminatory regulatory action” against Coupang.

Analysts also said the controversy could further disrupt security relations, with National Security Adviser Wi Sung-lac acknowledging last week that the issue has gone beyond a mere business matter and has spilled over into security concerns.

Wi referred to delayed negotiations on nuclear-powered submarines, including uranium enrichment and reprocessing.

“The FTC’s watchlist has raised speculation that if Coupang's founder is named as the controlling figure, it could have a negative effect on free trade agreements,” a private economic think tank researcher, who asked to remain anonymous, said.

The researcher pointed out Coupang's parent company, Coupang Inc., is listed on the New York Stock Exchange and already has been regulated by U.S. authorities, a frequently-referenced argument against Kim being added to the FTC list.

By designating Coupang’s executive as a controlling shareholder and imposing obligations, some argue that it amounts to the extraterritorial application of Korean regulations, potentially conflicting with the bilateral trade pact.

An international relations professor, speaking on condition of anonymity, said Kim’s designation as the legal controlling figure “leaves room” for U.S. lawmakers to send another joint protest letter. In a letter issued by Republican members of the U.S. House of Representatives on April 21, they urged Seoul to stop "discriminatory regulatory action” against Coupang, which primarily operates in Korea.

In a parallel move, 96 Korean lawmakers signed a joint protest letter delivered to the U.S. Embassy in Seoul, Tuesday, demanding that Washington fully respect Korea's judicial sovereignty and independent law enforcement.

“Things even could get more complex,” the professor added, noting that in the same week, the U.S. Trade Representative raised objections to Korea’s network usage fee policy, calling it one of the “craziest foreign trade barriers.”

“These trade issues are intertwined with security matters, adding further burdens for Korea,” he said.

When asked about whether the FTC’s decision would negatively affect Korea–U.S. security and trade discussions, Cheong Wa Dae spokesperson Kang Yu-jung said, “It was decided by the FTC according to its own laws and principles.”

On Tuesday, Ministry of Foreign Affairs spokesperson Park Il said that the government will manage the Coupang-related issue so that it will not have a "negative impact on security discussions between Korea and the U.S."