"Actively Proving Unfairness in Court Through Administrative Litigation"
On the 13th, the Korea Fair Trade Commission (KFTC) decided to impose a fine of 140 billion won and refer Coupang to the prosecution for "deceptive consumer practices through manipulation of search rankings." Coupang immediately reacted strongly, criticizing the decision as "anachronistic and against innovation." Coupang stated that it intends to actively prove the unfairness of the decision in court through administrative litigation.
In a statement released that day, Coupang said, "The KFTC's decision claiming that Coupang's Rocket Delivery, chosen by many citizens as a rational choice due to low prices and convenient delivery, is deceptive to consumers ignores the rights of smart consumers in the digital age," and criticized it as "anachronistic and against innovation."
The KFTC judged that Coupang manipulated search rankings by mobilizing its employees to increase sales of private brand (PB) products and directly purchased products while selecting the product search ranking called 'Coupang Ranking,' constituting a 'customer inducement act by deception' prohibited under the Fair Trade Act. It concluded that Coupang deceived consumers by placing PB or directly purchased products higher in the search rankings than other 'intermediary products.'
In response, Coupang argued, "Unlike other open markets, we have spent tens of trillions of won annually to directly purchase Rocket Delivery products, deliver them quickly, and guarantee free returns," adding, "Coupang's 'Ranking' is a service that 'recommends' fast, high-quality, and affordable products to customers. Customers visit Coupang to use this differentiated Rocket Delivery service, and it has been natural for Coupang to recommend Rocket Delivery products to customers."
Furthermore, Coupang expressed regret over the KFTC's disproportionate measures, stating, "We regret the KFTC's unfair action of unprecedentedly penalizing 'product display,' deciding on excessive fines that far exceed half of the total fines imposed on the top 500 domestic companies last year, along with criminal prosecution," and emphasized, "We will actively prove the unfairness in court through administrative litigation."
So far, Coupang has emphasized through the KFTC plenary meetings that product display and ranking services are the inherent rights of distribution companies and have been continuously improved according to consumer preferences to recommend high-quality and affordable products to customers. It also claimed that there is no evidence that profitability improved simply because PB products were exposed at the top of the search rankings.
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