Coupang Falsely Listed Subcontract Unit Prices... Fair Trade Commission Sanctions

Unfair Subcontracting Transactions Worth 113.4 Billion KRW
Correction Order and Fine of 178 Million KRW Imposed

Coupang continues its rapid growth by recording an all-time high performance in the second quarter of this year. The photo shows Coupang headquarters in Songpa-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Coupang has been sanctioned by the Fair Trade Commission for issuing documents with falsely stated subcontracting prices.

On the 22nd, the Fair Trade Commission announced that it imposed corrective orders and a total fine of 178 million KRW on Coupang and its private brand (PB) specialized subsidiary CPLB for issuing purchase order documents containing false subcontracting prices.

According to the Fair Trade Commission, from March 2019 to January 2022, Coupang and CPLB issued purchase order documents with falsely stated subcontracting prices to 218 subcontractors while outsourcing the manufacturing of PB products sold through Coupang’s e-commerce platform.

During this period, the number of purchase orders with falsely stated subcontracting prices issued by Coupang and CPLB reached 31,405 cases, with a total order amount of 113.4 billion KRW.

When a principal business operator issues documents containing false information that differs from the actual subcontracting transaction relationship while outsourcing manufacturing to a subcontractor, it constitutes a violation of Article 3, Paragraph 1 of the Act on the Fairness of Subcontract Transactions (Subcontracting Act).

The Fair Trade Commission stated, "This measure sanctions the act of issuing purchase order documents with false prices that differ from the actual subcontracting transaction relationship by the principal business operator, and it is expected that more subcontracting contracts will comply with the obligation to issue accurate documents in the future."

In response, Coupang expressed its intention to contest the Fair Trade Commission’s sanction and seek a court ruling. A Coupang representative said, "We only recorded provisional prices with the agreement of subcontractors to prevent exposure of the subcontractors’ core competitive product price information, and there is no fact of stating false prices. We will contest the Fair Trade Commission’s decision and seek a court ruling."

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