Coupang threatens to suspend missile deliveries and restrict investments after record antitrust fine

SEOUL, June 14 (AJU PRESS) – South Korean e-commerce giant Coupang has signaled it may halt its fast delivery services and investment plans after the government imposed a record fine on the company for providing unfair business benefits on its private label products.

The Fair Trade Commission (FTC) fined Coupang 140 billion won ($108 million) on Thursday for manipulating search algorithms and publishing false product reviews. In addition to imposing the toughest penalties ever on Korean companies, the regulator plans to file a complaint with prosecutors against Coupang and its private label manufacturers.

Coupang immediately backtracked, warning that if the company was banned from freely recommending and selling products covered by Rocket Delivery, it might be forced to discontinue the next-day shipping option that had been key to its meteoric rise. Coupang argued that this could significantly inconvenience consumers.

“If the FTC prohibits product endorsement practices, all of our direct product purchasing services, including rocket delivery, will become difficult to sustain,” Coupang said.

She added that it may be necessary to suspend previously promised logistics investments worth 3 trillion won for free shipping nationwide and the allocation of 22 trillion won for Rocket Delivery inventories.

In an apparent move to reassess future logistics expenditures, Coupang abruptly canceled a planned June 20 groundbreaking ceremony for an advanced logistics center in the southern port city of Busan.

Coupang criticized the 140 billion won fine – equivalent to 23 percent of the company’s 2022 operating profit – as excessive, saying it was “unprecedented in the world” for mere product presentation practices.
The company announced that it would file an administrative lawsuit.

While the FTC’s move raised concerns about a broader crackdown on private label brands in retail channels, other e-commerce players indicated little impact was expected.

Many see this as targeting manipulation of Coupang’s algorithm, rather than an industry-wide crackdown on promotional activities.

“If search algorithms have been manipulated, sanctions are understandable,” the national e-commerce company said.

The FTC responded that the penalty did not prohibit or regulate the supply of rockets or general product recommendations.

“Claims that this would prevent delivery of missiles or degrade service mislead the public,” the FTC said.