Coupang fined $102 million for manipulating search algorithm

South Korea’s antitrust regulator has fined e-commerce giant Coupang 140 billion won ($102 million) for using unfair search algorithms and manipulating product reviews to boost sales of its own-brand products.

The Fair Trade Commission (FTC) also referred the company, as well as one of its subsidiaries, Coupang Private Label Brands (CPLB), to prosecutors for further investigation and ordered the companies to take corrective action.

According to the FTC, Coupang used “deceptive algorithms” that gave it greater access to the retailer’s own-brand products on its platform from February 2019 compared to products from other suppliers.

At least 64,250 types of products were prioritized in this way, resulting in total sales of these items increasing by more than 76 percent during this period.

As of 2019, the company also has 2,297 employees writing positive reviews of private label products in an effort to increase sales.

To date, they have written a total of 72,614 reviews of 7,342 types of private label items, which has helped to more easily expose these products in violation of antitrust laws and the Fair Trading Act.

“Such practices prevent customers from making wise choices and impede fair competition in the marketplace,” the FTC said, promising a tough response to such unfair business practices.

Founded in July 2020, CPLB is a subsidiary of Coupang responsible for selling private label items.