[Column] What Coupang Truly Needs to Argue in Court

The issue is not whether to pay a fine of 162.8 billion won or not. The core question is whether money was earned through illegal means. This is about the essence of the lawsuit filed by Coupang in response to the administrative sanctions imposed by the Fair Trade Commission (FTC).

Coupang is the number one e-commerce company in South Korea. As of last year, it occupied about a quarter of the domestic online market, surpassing 30 trillion won in sales. In terms of sales alone, it recorded 31.8298 trillion won, overwhelmingly surpassing major domestic retail companies such as Lotte Shopping (14.5559 trillion won) and E-Mart (29.4722 trillion won). The FTC judged that this giant company, Coupang, earned money by attracting consumers to sell more products favorable to itself. It was alleged that Coupang manipulated search algorithms and mobilized employees to expose private brand (PB) products and directly purchased products at the top of search rankings, thereby hindering fair competition. The FTC concluded that such actions by Coupang were illegal and imposed a fine of 162.8 billion won. Additionally, it issued a corrective order to stop the manipulation of search rankings through algorithm tampering and employee reviews.

Coupang responded sharply. In the materials released in June when the FTC first announced the fine, Coupang stated, "We have spent tens of trillions of won annually to directly purchase Rocket Delivery products, deliver them quickly, and guarantee free returns," adding, "If we cannot freely recommend and sell Rocket Delivery products, it will be difficult to maintain the current service, which will inevitably lead to enormous inconvenience and damage to consumers." Coupang completely refuted the FTC’s judgment and hinted at the possibility of discontinuing Rocket Delivery.

The 162.8 billion won fine imposed on Coupang is the largest among distribution companies. It is a severe loss for Coupang. However, an even greater loss is the stigma attached to the company as one that deceived and intimidated consumers throughout the process. The corporate image has been damaged. Corporate image is a potential asset for attracting future customers. Therefore, the scale of losses stemming from image damage is difficult to estimate.

The court’s time has already begun. The court, which suspended the enforcement of the corrective order against Coupang, has started the main trial to decide whether to cancel the corrective order and the fine itself. Earlier, Coupang filed a lawsuit to cancel the corrective order and simultaneously requested a suspension of enforcement until the verdict is delivered, which the court accepted on the 10th.

The first trial of the main lawsuit will be held on the 21st of next month. If Coupang repeats its existing argument in this legal battle that "the FTC’s judgment is thoroughly illogical and that it will be difficult to maintain the Rocket Delivery service as it stands," there will be no resolution. Coupang must clarify why prioritizing PB products is a legitimate and lawful business practice and present reasoning that consumers can accept in this process. Isn’t that an accurate recognition of the current reality and a corporate duty toward consumers?