Coupang Faces Political Firestorm Over Labor Probe Allegations Ahead of National Assembly Hearings

SEOUL, Oct. 20 (Korea Bizwire) — South Korean e-commerce giant Coupang has found itself at the center of a political and legal storm after a prosecutor alleged that senior officials pressured investigators to clear the company of wrongdoing in a wage-related case — a revelation that has reignited debate over prosecutorial reform and cast new scrutiny on corporate influence in public institutions.

The controversy erupted after Moon Ji-seok, a sitting prosecutor, testified before the National Assembly’s Environment and Labor Committee on October 15.

He claimed that his superiors instructed him to omit key evidence in a case involving unpaid severance for day laborers at Coupang Fulfillment Services (CFS), leading to the case being dismissed without indictment earlier this year.

In January, the Bucheon branch of the regional labor office had recommended prosecution, but the case was dropped by prosecutors in April. Moon said he had since requested an internal investigation into his superiors and, appearing tearfully before lawmakers, urged that “every official who acted improperly be held accountable.”

His testimony triggered an immediate political backlash. Democratic Party leader Jung Cheong-rae cited the case as proof of the need for prosecutorial reform, vowing to “uncover the full truth behind Coupang’s external pressure.”

The controversy has since expanded beyond the judiciary, drawing attention to the company’s recruitment of former bureaucrats and regulators — a pattern critics say blurs the line between public service and private interest.

Industry records show that since May, Coupang has hired at least 10 former public officials, including eight from the Ministry of Employment and Labor, one from the Fair Trade Commission, and others from the Ministry of Trade, Industry and Energy.

Mounting Scrutiny Across Multiple Fronts

The revelations come as Coupang already faces multiple parliamentary inquiries this month, spanning issues from unfair business practices and courier overwork deaths to commission fees and payment delays to vendors.

At the same October 15 hearing, Coupang Fulfillment Services CEO Chung Jong-chul pledged to revise internal policies on temporary workers’ severance pay “to reflect fair standards.” The company has otherwise remained largely silent, wary of intensifying public outrage ahead of a comprehensive National Assembly audit later this month.

Separately, labor rights concerns continue to dog the company. Earlier this month, a 45-year-old delivery subcontractor in Daegu died of a brain hemorrhage after working long hours during the Chuseok holiday, prompting allegations of overwork. Progressive Party lawmaker Jeong Hye-gyeong denounced Coupang during the hearing, likening it to “a vampire company sucking workers’ blood under the protection of elite bureaucrats and big law firms.”

Labor Minister Kim Young-hoon responded that his ministry would “carefully consider launching a special labor inspection.”

Coupang has also come under fire for allegedly imposing unfavorable terms on agricultural and seafood suppliers and for aggressive advertising practices tied to its affiliate, Coupang Partners. Chairman Bom Kim, currently abroad, was summoned as a witness for the October 28 general audit after declining to appear earlier this month.

Regulators Turn Up the Heat

Compounding the company’s woes, the Fair Trade Commission (FTC) recently announced penalties against Coupang for coercing at least 48,000 customers into agreeing to a price hike for its paid Wow Membership service. The FTC also accused the company of misleading advertising about membership benefits and of bundling services from its streaming and food delivery units, Coupang Play and Coupang Eats, without clear consent.

With allegations mounting on multiple fronts — labor, trade, and fair competition — Coupang insiders admit the company is struggling to keep pace with the cascading crises. “It feels like we can’t even catch our breath,” one employee said privately. “We just want the audit season to end.”

Yet, as political and regulatory pressure intensifies, the company’s greatest test may be how it navigates the deepening controversy over the alleged “prosecutorial pressure” — a case that has become a flashpoint in South Korea’s broader struggle over power, accountability, and reform.

Ashley Song (ashley@koreabizwire.com)