Lee Jae-myung's Coupang 'Warning': "Harsh Working Conditions and Power Abuse Are Not Innovation"

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Lee Jae-myung, Governor of Gyeonggi Province, strongly criticized the business practices of Coupang, the rocket delivery service recently listed on the U.S. Nasdaq market.

He further urged the Fair Trade Commission, the economic watchdog, to make a swift decision, stating that it has delayed its ruling on Coupang for over a year despite the company pursuing profits at the expense of people and abusing small business owners for revenue.

On the 5th, Governor Lee wrote on Facebook, "Who can deny that the platform economy is important in the untact (contactless) era?" He added, "It is inherently good that consumer convenience is enhanced and industries creating added value are increasing, and I always have respect for entrepreneurs who constantly innovate."

However, he pointed out, "If the growth of the platform economy is achieved by exploiting the workers who actually work for the company and the small business owners who collaborate with it, that is another issue." He noted, "Although Coupang recently got listed on the U.S. market, it is now at the center of controversy over abuse of small business owners, following a series of deaths among delivery workers."

Governor Lee explained, "Coupang’s 'Winner System' transfers all the product photos and reviews painstakingly accumulated by existing sellers to whoever sells even one won cheaper, and due to settlements taking at least 50 days, sellers have to worry about 'profitable bankruptcy' even if their products sell well."

He added, "The alternative 'pre-settlement program' offered is a financial product lending money at an annual interest rate of 4.8% from banks." He expressed doubts, saying, "No matter how new the platform model based on direct purchase is, I question whether operating in a way that exhausts small business owners is a sustainable model for coexistence with partners."

In particular, he criticized, "Politics and administration exist to correct such (unfair) practices, but it is very regrettable that the Fair Trade Commission has not made a decision on Coupang’s 'Winner System' for about a year." He emphasized, "The relevant institutions, which can be called economic prosecutors, must promptly make a fair judgment so that platform economy participants are not driven to the edge and can compete fairly."

Finally, Governor Lee stated, "Recently, companies have been focusing on ESG management, which emphasizes environmental, social values, and ethical governance." He delivered a direct blow, saying, "What Coupang should learn from 'Amazon,' which it has declared as its role model, is innovation itself, not harsh labor conditions that take lives or abusive operational methods targeting small business owners."