Regulator sends review report citing obstruction charges

The Korea Fair Trade Commission has launched sanction proceedings against Coupang Inc to impose a fine of up to 100 million won ($73,800) after the e-commerce giant refused to cooperate with an on-site inspection.

According to industry sources, the Fair Trade Commission sent Coupang a review report Wednesday detailing charges of investigation obstruction. The report sets out the legal violations identified by the commission's examiners and their recommended sanctions. However, sending the report does not finalize any penalty — a final decision will come only after Coupang submits its rebuttal and the commission completes its deliberation.

Coupang Inc's headquarters in Songpa-gu, Seoul [Herald Business DB]
Coupang Inc's headquarters in Songpa-gu, Seoul [Herald Business DB]

Under the Act on Fair Transactions in Large-Scale Distribution, a business operator that refuses, obstructs or evades a Fair Trade Commission investigation without justifiable cause is subject to a fine. The ceiling varies with the number of violations, and repeat offenders can be fined up to 200 million won. Because Coupang is not classified as a repeat offender, the maximum fine in this case is 100 million won.

The proceedings stem from an on-site inspection the commission conducted in August to investigate alleged violations of the large-scale distribution act by Coupang. Investigators attempted to secure relevant documents at the time, but Coupang challenged the legality of the inspection procedures and refused to cooperate, halting the probe.

Coupang subsequently filed an administrative lawsuit seeking to nullify the commission's inspection order and applied for a stay of execution. A court initially suspended the inspection on a provisional basis but rejected the stay application on Sept. 23. Coupang has since filed a further appeal against that ruling.

The commission plans to accept Coupang's written response, give the company an opportunity to review the evidence, and then proceed with its deliberation. Separately, the commission is also expected to consider resuming the suspended on-site inspection.

Fair Trade Commission Chairman Ju Byung-ki said in a recent broadcast appearance that the commission must "make every effort to restore the justice that has been undermined by the suspended investigation."


y2k@heraldcorp.com