US frames case as discrimination against American firm; Seoul scrambles to contain fallout
Coupang Inc. has been hit with a record fine of approximately 624.7 billion won ($410 million) over a personal data breach, fueling concerns that the case could escalate into a trade dispute between South Korea and the United States.
In the US, the Coupang case is increasingly being viewed not as routine enforcement of data protection law but as discriminatory treatment of an American company.
Some US lawmakers and investors have pushed back, arguing that the South Korean government is unfairly targeting Coupang, which is listed on the New York Stock Exchange.
The friction came into sharp relief at a House Foreign Affairs Committee hearing on June 3, where Republican lawmakers argued that the South Korean government was discriminating against Coupang as an American company. Republican members also took a leading role in a letter sent to the South Korean Embassy calling for an end to what they described as discriminatory regulation.
Secretary of State Marco Rubio acknowledged that "some actions by Korea against American companies" had affected Washington's ability to finalize a trade agreement — the first time a senior US official publicly stated that the Coupang issue had influenced trade negotiations.
At a Senate confirmation hearing last month for Michelle Steel Park, Donald Trump's nominee for US ambassador to South Korea, Sen. Bill Hagerty — a close Trump ally — cited the Coupang case and said he was concerned that "some American technology companies appear to be facing discrimination in Korea." Steel said she would work to ensure American companies receive equal treatment in South Korea.
The House Judiciary Committee also conducted a closed-door investigation in February into Harold Rogers, Coupang's interim representative in Korea, as part of a broader inquiry into whether American companies face discriminatory treatment in South Korea.
Much of this US pressure has been driven by Coupang's own aggressive lobbying campaign. From the moment the data breach became public, the company mounted a full-court press in Washington to reframe its legal exposure as a trade issue.
In the first quarter of this year alone, Coupang spent $1.09 million (about 1.66 billion won) on US lobbying — an 87.9 percent increase from the previous quarter. Its lobbying targets ranged across the US executive branch, Congress and the private sector.
The South Korean government, which has taken a firm stance against Coupang, is working to prevent the case from spilling over into trade and security issues.
When a US official raised the possibility of trade friction between the two countries last December, Seoul launched a cross-ministry response.
Kim Yong-beom, the presidential office's policy chief, personally chaired an emergency meeting on the Coupang situation. The gathering drew minister-level officials from across the government — including the minister of science and ICT, the chairman of the Personal Information Protection Commission, the chairman of the Broadcasting and Communications Commission, and the chairman of the Fair Trade Commission — as well as officials from the foreign policy line.
Ministry of Trade, Industry and Energy Minister Kim Jung-kwan and Trade Minister Yeo Han-koo have each made multiple trips to the United States this year — three and two visits, respectively — to manage the situation and prevent it from hardening into a trade dispute.
"Coupang's lobbying and government-relations activities appear to be having an effect on US politics, and related remarks continue to surface in Congress, so concerns about this issue expanding into a trade problem are real," said Kim Tae-hwang, a professor of international trade at Myongji University.
However, he added that "the US side has not, at least so far, taken issue with Korea's enforcement of its personal data protection law or the legal process itself," and said Seoul should "emphasize that its response is principled and grounded in domestic law and procedure."
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