First Hearing Date Set for the 21st of Next Month
Dispute Over Cancellation of Fines and Corrective Orders
Previous Suspension Request Partially Granted
Algorithm Maintenance Allowed Until Final Verdict
The lawsuit filed by Coupang, which was fined approximately 160 billion KRW by the Fair Trade Commission (FTC) for manipulating search rankings to induce purchases of its private brand (PB) products, will officially begin next month. Coupang submitted a request to suspend the execution of the penalty until the verdict is delivered, and the court accepted this request. From now on, the main lawsuit disputing the cancellation of the fine and corrective orders will commence.
According to industry and legal sources on the 14th, the first hearing date for Coupang's lawsuit against the FTC to cancel the corrective order has been set for the 21st of next month. The case will be handled by the Administrative Division 7 of the Seoul High Court (Chief Judge Gu Hoe-geun), which also made a partial ruling to suspend the execution. Both the suspension case and the main lawsuit are assigned to the same court division.
Both Coupang and the FTC plan to submit written opinions to the court in advance and engage in intense debates during the trial. During the previous suspension request case, both sides continued a "war of briefs" even after the hearing concluded to persuade the court. In the main lawsuit, key issues include whether Coupang’s prioritization of PB products in search results and the use of employees to write product reviews constitute legitimate business activities, and whether the imposed fine of 162.8 billion KRW is justified.
The court sided with Coupang in the preliminary suspension case. It ruled that if Coupang were forced to stop its existing business practice of prominently featuring PB products before the validity of the FTC’s corrective order is determined, it would suffer irreparable harm. The court stated, "There is a concern that the applicants may suffer irreparable damage, and there is an urgent need to suspend the effect to prevent this."
However, regarding the 162.8 billion KRW fine imposed on Coupang, the court dismissed the suspension request, stating, "Based solely on the evidence submitted by the applicants, it is not recognized that there is a concern of irreparable damage or an urgent need to suspend the effect due to the order." The court implied that paying the fine does not place Coupang at risk of extinction nor cause irreparable harm.
Coupang already paid the 162.8 billion KRW fine imposed by the FTC last month. The company’s strategy is to recover the paid fine if it wins the main lawsuit. Earlier, Coupang Inc., the parent company of Coupang, disclosed in its Q2 earnings report that it had preemptively accounted for an estimated FTC fine of 163 billion KRW under selling and administrative expenses, resulting in an operating loss of 34.2 billion KRW.
Although Coupang breathed a sigh of relief after the partial acceptance of the suspension request, if it loses the main lawsuit, it will not only fail to recover the fine but also be required to revise the search ranking algorithm that prioritizes PB products. In that case, PB products such as Tamsa Water, Comet Toilet Paper, and Gomgom Fresh Milk are expected to be found only at the bottom of search results, likely leading to a decline in related sales.
Industry and legal circles largely predict that the main lawsuit will not be concluded within this year. Administrative lawsuits typically take anywhere from several months to several years to reach a conclusion. Moreover, the judicial personnel reshuffle expected in January next year is also cited as a factor that could prolong the trial. Even if the first hearing is held next month, the reassignment of judges will require the new court division to review case records, inevitably causing some delay.
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