The Korea Fair Trade Commission (FTC) has imposed sanctions on Coupang Corp., South Korea’s leading e-commerce platform, for violations of the Act on Fair Transactions in Large-Scale Distribution Business. The regulator issued a corrective order and imposed an administrative fine of KRW 2.185 billion (approximately EUR 1.5 million), while also ordering restitution to thousands of affected suppliers.
The FTC found that Coupang engaged in systematic practices to preserve its profit margins by transferring commercial risks and costs to suppliers. Between January 2020 and October 2022, Coupang established Pure Product Margin targets and regularly monitored supplier performance. When suppliers failed to meet these targets, the company demanded reductions in delivery prices and pressured suppliers by suspending or threatening to suspend orders. The FTC concluded that this conduct unlawfully disadvantaged suppliers and shifted commercial risk away from the distributor.
Coupang also imposed Gross Margin targets and required suppliers to bear additional costs, including advertising fees, promotional program expenses, and data service fees when margin targets were not achieved. The FTC determined that these demands constituted unlawful requests for economic benefits, as suppliers were effectively compelled to absorb operational costs in order to maintain their business relationship with the platform.
The regulator further found widespread violations relating to delayed payments. Between October 2021 and June 2024, Coupang delayed payments totaling KRW 280.9 billion (approximately EUR 195 million) across more than 508,000 transactions involving over 25,700 suppliers. Payment delays exceeded the statutory 60-day deadline by up to 233 days. Coupang also failed to pay statutory late payment interest amounting to KRW 853 million (approximately EUR 590,000). The FTC clarified that payment deadlines begin on the date of product delivery, rejecting Coupang’s argument that the period should start after internal inspection.
Additional violations involved Coupang’s Experience Group promotional program, in which suppliers provided products for consumer review. Coupang failed to return unsold products valued at KRW 536.8 million (approximately EUR 370,000) to nearly 3,000 suppliers.
The FTC emphasized that Coupang’s conduct undermined the fundamental principle of direct purchase transactions, where distributors assume ownership and associated risks. By shifting margin and inventory risks onto suppliers, Coupang distorted the legal allocation of risk and abused its superior bargaining position.
The Commission stated that it will continue closely monitoring dominant distributors and take strict enforcement action to prevent unfair practices in the e-commerce sector.