The Fair Trade Commission (FTC) of South Korea approved a voluntary corrective plan proposed by Coupang and its private-label unit to resolve allegations of unfair business practices with subcontractors without pursuing legal action. This agreement includes programs totaling 3 billion won ($1.94 million) aimed at improving cooperation and supporting subcontractors.
Investigation by the FTC found that since 2022, Coupang and Coupang Private Label Brands (CPLB) had issued contracts to 314 subcontractors that failed to include legally mandated information. Additionally, 94 subcontractors experienced unjustified price reductions through discount promotions not detailed in their contracts. These findings prompted the companies to seek resolution through voluntary measures rather than penalties or court procedures.
The agreed corrective package significantly exceeds anticipated fines estimated between 600 million won and 1.1 billion won. Specific commitments include allocating 1.05 billion won to offset subcontractors’ expenses related to product development, manufacturing, and logistics. Another 1 billion won will fund advertising of private-label products via Coupang’s online platforms, while 450 million won will support offline exhibitions to boost product visibility.
Additional funds totaling 400 million won will finance consulting services and initiatives aimed at expanding subcontractors’ access to overseas markets. Coupang also promised to maintain regular meetings with subcontractors to foster dialogue about quality improvement and workplace safety, further emphasizing shared growth.
However, the FTC recently declined a separate corrective proposal from Coupang valued at 60 billion won concerning allegations of market dominance abuse against restaurant owners and consumers. Experts attribute this rejection to the wider impact observed in that case, which involved a larger group of affected parties.