The FTC maintains its stance on record-high fines for Coupang

Fair Trade Commission (FTC) Chairman Han Ki-jeong speaks during a press conference at a restaurant in Busan, a port city in southern Korea. Courtesy of the FTC

The investigation into AliExpress, Temu and YouTube is expected to be finalized in July

Author: Lee Min-hyung

Fair Trade Commission (FTC) Chairman Han Ki-jeong reiterated the regulator’s willingness to impose sanctions on Coupang, citing the need to build a fair trade ecosystem in the online platform market despite strong opposition from the e-commerce company.

He justified the FTC’s recent decision to impose fines of 140 billion won ($100 million) on the country’s largest e-commerce company, saying it was inevitable not only for the sake of the fair competition ecosystem but also for the benefit of customers.

“The sanctions were intended to establish a fair trading order and increase benefits for customers,” he told reporters at a news conference on Friday. “It was made in accordance with the law and principles.”

After the FTC imposed the highest-ever fine on a retail player, some critics said it was too harsh because most other e-commerce players follow similar sales practices to Coupang.

Coupang was fined over allegations that the company manipulated an in-app algorithm to boost sales of private label products.

Coupang maintains his innocence and intends to initiate administrative proceedings against the commission. The company says its competitors also use similar sales practices to boost sales of products under their private labels.

“We will send Coupang a resolution that will demonstrate the company’s illegality and provide details of the company’s prohibited practices,” Han said.

Addressing concerns about possible reverse discrimination against a domestic player, the regulator chief also said there was an ongoing investigation into foreign e-commerce companies – such as AliExpress and Temu – which have sparked a series of controversies over inappropriate sales activities in the country.

“The FTC investigates foreign platform companies without any discrimination,” he said. “We are investigating whether AliExpress and Temu violated the country’s e-commerce law. “Major competition authorities in the United States and Europe are also taking strict legal action against any unfair practices by platform companies.”

According to the FTC, the investigation into the Chinese e-commerce company will be completed by the end of July.

Han also suggested severe punishment for Google Korea for allegedly violating fair competition rules. The company is suspected of selling YouTube Music as part of its YouTube Premium subscription service.

“We will thoroughly investigate the matter, analyzing whether the sales practice impeded fair competition in the domestic music streaming market,” he said. “The FTC will conclude its ongoing investigation into the company in July and will take strict action for violations of local law.”