KCC Launches Fact-Finding Probe into Coupang's "Kidnapping Ads"
Coupang: "Will Actively Cooperate with Investigation... Will Devise Measures to Eradicate Fraudulent Ads"
Investigation Also to Cover Possible Restrictions on WOW Membership User Cancellation Rights
On June 20, Coupang announced that it would actively cooperate with the Korea Communications Commission's (KCC) fact-finding investigation into so-called "kidnapping ads" and would devise measures to eradicate fraudulent advertisements.
On the same day, the KCC launched a fact-finding investigation into so-called "kidnapping ads," in which users are forcibly redirected to Coupang simply by scrolling down or clicking the "back" button on various websites.
Previously, since November of last year, the KCC has been reviewing the current state of Coupang's online advertising, execution methods, and business structure. As a result, the KCC stated that Coupang ads have caused inconvenience by forcibly redirecting users to Coupang's website or application from internet spaces such as social networking services (SNS) or homepages, regardless of user intent. The KCC also pointed out shortcomings in Coupang's procedures for managing these advertisements.
In response, Coupang stated, "We have consistently taken strict measures against fraudulent advertising activities by certain malicious advertisers, including suspending payments, terminating accounts, and implementing a reporting reward system. We will actively cooperate with the KCC's investigation and work together to devise measures to eradicate fraudulent ads by certain malicious advertisers."
Additionally, the KCC plans to examine whether Coupang has engaged in prohibited acts under the Telecommunications Business Act. The KCC believes that Coupang's failure to support individual withdrawal from sub-services such as Coupang Eats and Coupang Play, under the pretext of an integrated account system, could be problematic. This practice may constitute a restriction of users' right to cancel, which is a prohibited act under the Telecommunications Business Act.
Coupang stated, "We have already provided a thorough explanation regarding the same matter in investigations by other agencies and have confirmed that there are no issues. We will actively clarify our efforts to protect users in this KCC investigation as well."
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