Coupang Accused of Manipulating Search Rankings and Abusing Supplier Power... Fair Trade Commission Investigation Underway

Logistics Center Fire and Harsh Working Conditions Lead to
Another Social Controversy

Fair Trade Commission's Precedent in Regulating Naver
Chairman Seongwook Jo Strongly Committed to Platform Fairness Establishment

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Moon Chaeseok] Coupang, which has sparked social controversy due to logistics center fires and poor working conditions, is now under investigation by the Fair Trade Commission for unfair practices such as 'gapjil' (abuse of power) against suppliers.

According to the industry on the 4th, the Fair Trade Commission recently detected allegations of Coupang violating the Fair Trade Act and conducted an on-site investigation at Coupang's headquarters in Songpa-gu, Seoul, at the end of last month.

Coupang is reportedly suspected of manipulating its search algorithm to prioritize its private brand (PB) products over those of other suppliers. The algorithm was changed to a 'self-preference' method, placing PB products at the top of the search screen while pushing other products down.

The Fair Trade Commission is also reportedly looking into suspicions that Coupang engaged in 'gapjil' behavior toward suppliers. This includes demanding that suppliers provide products at the 'lowest price' first and retaliating by imposing disadvantages if products are not supplied at prices cheaper than those on other platforms.

Furthermore, the Fair Trade Commission confirmed during the on-site investigation allegations that Coupang forced suppliers to purchase advertisements and excluded companies that refused from various benefits such as Rocket Delivery, as well as allegations of unfair returns.

A Fair Trade Commission official stated, "We cannot confirm the progress or details of the case."

Jongwook Cho, Chairman of the Korea Fair Trade Commission. (Photo by Korea Fair Trade Commission)

Since Chairman Cho Sung-wook took office, the Fair Trade Commission has been taking strong measures against anti-competitive behaviors by digital platform companies, such as self-preference and blocking multi-homing (using multiple platforms simultaneously). A special ICT task force focusing on investigating illegal activities by platform companies has also been established.

In this regard, the Fair Trade Commission previously imposed a fine of 26.7 billion KRW on Naver Shopping and Video for artificially altering search algorithms to place their own products and content at the top. Such actions constitute abuse of market-dominant position by obstructing other businesses' activities, discriminatory treatment, and unfair customer inducement under unfair trade practices.

This content was produced with the assistance of AI translation services.