Coupang Faces Shareholder Class Action Lawsuit in the U.S.
Multiple Law Firms Recruiting Plaintiffs for Class Actions at Home and Abroad
Fair Trade Commission Warns of Possible Business Suspension as Pressure Mounts
As mounting pressure intensifies on Coupang following the breach of personal information affecting 33.7 million customers, attention is now focused on the future course of action for Coupang Inc. founder and Chairman Bumseok Kim. In addition to facing lawsuits both domestically and internationally over the data leak, Coupang is also under government scrutiny, with the possibility of a "business suspension" being considered. Furthermore, civic groups are pressuring the company over its liquidity crisis and even urging Coupang to acquire Homeplus as part of its corporate restructuring.
According to the retail industry on December 22, Joseph Berry, a shareholder of Coupang Inc., filed a securities class action lawsuit on December 18 in the U.S. District Court for the Northern District of California against Coupang Inc., Chairman Bumseok Kim, and Chief Financial Officer Gaurav Anand, in connection with the recent data breach. Lawrence Rosen, the attorney representing the plaintiffs, stated in the complaint that this incident is "considered the largest personal information leak in Korean history," and argued that Coupang either made false or misleading statements or failed to make required disclosures, resulting in investor losses.
Previously, Coupang became aware of the data breach on November 18 and disclosed it to the U.S. Securities and Exchange Commission (SEC) on December 16. However, the plaintiffs claim that Coupang failed to meet the obligation to disclose such incidents within four business days. Currently, Coupang is facing multiple class action lawsuits, including one in the Seoul Central District Court involving over 240,000 participants, while U.S. law firms are also preparing class actions seeking punitive damages and are recruiting plaintiffs for these lawsuits.
Bumseok Kim, Chairman of Coupang
Meanwhile, political circles are further ramping up the pressure. On December 19, Joo Byungki, Chairman of the Fair Trade Commission, stated, "We are also considering the possibility of a business suspension." The previous day, Cho Kuk, leader of the Cho Kuk Innovation Party, argued, "If Coupang delays measures to remedy the damage, the government should invoke the 'temporary suspension order' under the Electronic Commerce Act." Both political figures and civic groups have also insisted that Coupang should take social responsibility by acquiring Homeplus. Homeplus, which is currently undergoing corporate rehabilitation, must submit a rehabilitation plan by December 29, but with no prospective buyers appearing, the possibility of bankruptcy is being raised.
However, Coupang has refrained from making specific comments regarding whether Chairman Kim will issue an apology or what the company’s next steps will be. Some observers speculate that Chairman Kim may be preparing for a legal defense, resisting political pressure and gearing up for class action lawsuits. In fact, following the data breach, Coupang dismissed former CEO Park Daejoon and dispatched its General Counsel and Chief Administrative Officer to serve as acting representative in Korea.
Min Byungdeok, head of the Euljiro Committee of the Democratic Party, appeared on SBS Radio’s "Kim Taehyun’s Political Show" and remarked, "Chairman Kim seems unwilling to resolve the issue and is instead trying to settle it through legal means." He further increased the pressure by mentioning the possibility of a phased business suspension and a joint hearing by National Assembly standing committees.
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