Coupang Wins Lawsuit Against Fair Trade Commission Over 3.3 Billion Won Fine

Administrative Lawsuit to Cancel Penalty for Supplier Gapjil
Court Cancels Entire 3.3 Billion Won Penalty and Corrective Order
LG Saenggeon and Direct Transactions Resume, Ending 4 Years 9 Months of Conflict

Coupang, which was fined by the Fair Trade Commission (FTC) for abusing its power over suppliers including LG Household & Health Care, won a lawsuit challenging the penalty.

Coupang Headquarters, Songpa-gu, Seoul. Photo by Jinhyung Kang aymsdream@

On the 1st, the Seoul High Court Administrative Division 7 (Presiding Judge Kim Dae-woong) ruled in favor of Coupang in the lawsuit filed against the FTC seeking cancellation of corrective orders. The court ordered the FTC to bear all litigation costs.

Previously, in August 2021, Coupang was imposed a corrective order and a fine of 3.297 billion KRW by the FTC for violating the Fair Trade Act and the Large-scale Distribution Business Act. This penalty was issued following an investigation initiated by LG Household & Health Care’s complaint of unfair practices against Coupang in May 2019.

The FTC judged that from 2017 to September 2020, Coupang engaged in acts such as demanding price increases on the same products sold on other online malls and requiring advertising purchases from 101 suppliers including LG Household & Health Care, in order to reduce losses caused by its “lowest price guarantee” policy, as well as shifting discount costs.

At the time, Coupang argued that it did not hold a superior bargaining position in transactions with eight major suppliers including LG Household & Health Care, Yuhan-Kimberly, Korea P&G, Maeil Dairies, Namyang Dairy Products, Cuchen, SK Magic, and Lego Korea, but the FTC did not accept this. Consequently, in February 2022, Coupang filed an administrative lawsuit seeking cancellation of the FTC’s corrective order and related decisions.

Immediately after the victory, Coupang stated, “In 2017, as a newly established distributor with only a 2% share of the retail market, it was practically impossible to abuse bargaining power against large manufacturers who are industry leaders. Nonetheless, we welcome the court’s correction of the FTC’s decision, and we believe this ruling will greatly contribute to the development of the distribution industry, which is growing through fierce competition.”

Meanwhile, tensions between Coupang and LG Household & Health Care have recently eased. The two companies had halted transactions after conflicts during supply negotiations in April 2019, but on the 12th of last month, Coupang abruptly announced the resumption of direct product transactions after 4 years and 9 months, marking the restart of their collaboration.

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