The Story Behind Korea’s Laws: Your Guide to Korea’s Legal Pulse
SEJONG, Jan. 6 (Korea Bizwire) — The nation’s highest court is set to deliver a high-profile ruling on whether Coupang, the country’s dominant e-commerce platform, violated fair trade laws by collecting sales promotion fees and incentives from its suppliers—a decision that could reshape regulatory oversight of online retail practices.
The case stems from penalties imposed by the Fair Trade Commission (FTC), which accused Coupang of unlawfully collecting roughly 16.1 billion won ($12 million) from suppliers between 2017 and 2019 in the form of sales incentives and promotional cost-sharing.
Coupang challenged the sanctions and won at the appellate court in February 2024, which annulled about 3.3 billion won in fines and corrective orders, concluding that the FTC had applied the wrong legal provisions and failed to prove illegality.
The Seoul High Court ruled that payments Coupang received did not qualify as “sales incentives” under the Act on Fair Transactions in Large Franchise and Retail Businesses because they were not stipulated in annual basic contracts, as required by law.
The court also sided with Coupang on promotional cost-sharing, accepting the company’s argument that when its own advertising expenses were included, suppliers’ cost burdens did not exceed the legal cap.
The Coupang vehicle garage in downtown Seoul. (Yonhap)
The ruling, however, left key questions unresolved. Because parts of the judgment were sealed due to claims of trade secret protection, public discussion has largely focused on one finding—that Coupang did not hold a superior bargaining position over certain large suppliers—while broader legal interpretations remain opaque.
Legal experts say that had the FTC pursued different statutory provisions, Coupang might have borne the burden of proving the legitimacy of the payments.
Since the appellate victory, scrutiny of Coupang’s practices has intensified. Lawmakers have alleged that the company increasingly offsets price competition by pressuring suppliers to buy advertising or shoulder additional costs.
Based on disclosures to regulators, Coupang is estimated to have collected about 2.3 trillion won in advertising fees, promotional costs, and incentives in 2024 alone—nearly 10 percent of its direct-purchase transaction volume.
The Supreme Court’s forthcoming decision is expected to influence how aggressively regulators can police dominant online platforms as e-commerce continues to expand and Coupang’s market share grows. Even if the court upholds Coupang’s win, analysts say the FTC could revisit the company’s practices under changing market conditions.
The case has also drawn attention to the imbalance in legal firepower. Coupang has assembled a formidable defense team that includes former Supreme Court justices and senior lawyers from the elite Kim & Chang law firm, while the FTC is relying on a small legal staff and outside counsel from smaller firms.
A final ruling is expected to set an important precedent—not only for Coupang, but for how South Korea regulates power dynamics between large platforms and their suppliers in the digital economy.
Jerry M. Kim (jerry_kim@koreabizwire.com)
