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| Cho Hong-sun, a senior Korea Fair Trade Commission (KFTC) official, speaks during a press briefing on a punitive measure taken against e-commerce giant Coupang at the Government Complex Sejong, Thursday. Yonhap |
E-commerce giant plans to file administrative suit against punitive measure
By Yi Whan-woo
Coupang has been fined 3.29 billion won ($2.81 million) by the country's top antitrust regulator, Thursday, for its alleged involvement in unfair business practices and interfering in the business of vendors.
The Korea Fair Trade Commission (KFTC) said the e-commerce giant was found to have forced hundreds of sellers from early 2017 to September 2020 to comply with its unlawful sales and marketing policies to maintain its competitive edge over other online retailers amid the fierce battle for market dominance.
Those affected by such policies include LG Household & Health Care, Yuhan Kimberly, Maeil Dairies, Namyang Dairy Products and Cuchen.
The KFTC carried out its probe into Coupang after LG Household & Health Care, an LG Group affiliate, filed a complaint in 2019.
According to the antitrust watchdog, Coupang had urged its suppliers to raise sales prices of its goods sold in rival online malls to ensure that it could offer those products at the cheapest prices.
It additionally coerced suppliers to purchase ads and put the burden of expenses for promotional events on them. For instance, a total of 388 suppliers had to pay 5.7 billion won combined after Coupang offered discount coupons on daily necessities and baby products.
"The case is noteworthy as it illustrates that an online retailer is now in a predominant position over large companies as well as manufacturers of popular goods," Cho Hong-sun, a senior KFTC official, said during a briefing at Government Complex Sejong.
It noted such a case has only been witnessed in the past among department stores and supermarket chains that are mostly owned by conglomerates.
It also noted about 70 percent of domestic shoppers buy goods online and that its punitive measure against Coupang is "meaningful in uncovering and curbing new forms of unlawful trade."
Coupang, which denied its predominant position over the large firms during the KFTC investigation, expressed regret over the regulator's decision, saying that it will lodge an administrative suit in response.
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| A gigantic banner bearing the name of Korean e-commerce giant Coupang is displayed on the building of the New York Stock Exchange on March 11, to mark its debut on the U.S. stock market. Korea Times file |
While Coupang saw its sales expanding by 60 percent every year, it has been posting operating losses due to increased hiring and investment.
The KFTC's punitive measure adds to controversies surrounding Coupang in relation to corporate responsibility and joint prosperity with society.
The company has recently been criticized for poor industrial safety, with a blaze at its warehouse in July and deaths of overworked delivery workers being cited as examples.
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