[Invest&Law] Coupang Readily Pays 162.8 Billion Won in Penalties

Disputing Fair Trade Commission Decision
Refund Possible if Winning Cancellation Lawsuit

[Image source=Yonhap News]

Coupang, which filed an administrative lawsuit in protest against the imposition of a fine of 162.8 billion KRW by the Fair Trade Commission, is understood to have paid the entire fine.

Recently, Coupang filed an administrative lawsuit with the Seoul High Court, contesting the disposition and simultaneously requested a suspension of execution. However, although the court only granted the suspension of execution for the 'corrective order' part of the application, Coupang did not file a further appeal. This is interpreted as Coupang having paid the fine following the Fair Trade Commission's corrective order and fine imposition.

However, companies that receive fines usually pay the fine to the Fair Trade Commission first and get refunded if the court cancels the disposition decision. Therefore, if Coupang wins the main lawsuit, it is expected to recover all the fines paid.

Earlier, when announcing its Q2 performance, Coupang stated that it had reflected the estimated fine of 121 million USD (approximately 162.8 billion KRW).

Coupang is accused of manipulating the search ranking algorithm to give preferential treatment to PB (private brand) products and mobilizing about 2,000 employees to post around 70,000 reviews on PB products. In June, the Fair Trade Commission found that Coupang and its subsidiary CPLB, which exclusively supplies PB products, violated the Fair Trade Act and imposed a corrective order to stop illegal acts such as algorithm manipulation, along with a fine of about 140 billion KRW. Subsequently, as sales figures were added until the end of the review, the fine increased to 162.8 billion KRW. This is known as the largest fine ever imposed on a domestic distributor.

Last month, Coupang filed a lawsuit to cancel the Fair Trade Commission's disposition and requested a suspension of execution.

The Seoul High Court Administrative Division 7 (Presiding Judge Gu Hoe-geun, Judges Bae Sang-won and Choi Da-eun) partially granted Coupang's request for suspension of execution against the Fair Trade Commission's sanction on the 10th. The court accepted only the part requesting suspension of the corrective order and suspended its effect until 30 days after the main judgment date.

However, regarding the fine, the court rejected the request, stating, "There is no concern that irreparable damage will occur to Coupang due to the fine payment order, nor is there an urgent need to suspend the effect of the fine payment order."

Subsequently, the Fair Trade Commission filed an appeal against the suspension of execution decision, and the case is currently under review by the Supreme Court.

The first hearing of the main lawsuit is scheduled for the 21st of next month.

Han Su-hyun, Legal Times Reporter