Antitrust watchdog chief hints at referring Coupang chair on criminal charges

Fair Trade Commission (FTC) Chairman Ju Biung-ghi signaled that the agency may refer Coupang chairman Bom Kim to prosecutors on criminal charges over allegations that the e-commerce giant submitted false documents to avoid designation as a conglomerate. 

"Coupang submitted a written pledge stating that members of the controlling family were not involved in management, but we found that this pledge had been violated," Ju said at a press briefing on Tuesday. "When false statements are proven, the only options under current law are criminal referral and criminal sanctions."

The FTC last month changed Coupang's controlling entity — a legal term for the individual deemed to effectively control a conglomerate — to Kim from the corporation itself, citing the involvement of his younger brother and an executive vice president at the company.

The agency has since been examining whether the pledges Kim submitted, confirming that no family members were involved in management, constituted false filings. Under the current Monopoly Regulation and Fair Trade Act, submitting false documents in connection with conglomerate designation carries a penalty of up to two years in prison or a fine of up to 150 million won ($99,800).

"Strict action is needed against submitting false materials for conglomerate designation," Ju said, adding that the FTC would pursue the introduction of administrative fines to enable "strong economic sanctions commensurate with the gravity of the violation." Such fines would be levied against the controlling entity personally. On the level of potential fines, he said the agency was "discussing whether the maximum should be 20 billion won, 10 billion won or 9 billion won."

On Starbucks Korea, which is facing public criticism over its refund policy for prepaid balances, Ju drew a clear line. "There is no violation of the Fair Trade Act, and there is no reason to impose any regulation or sanction," he said. "This is a matter for Starbucks to apologize to the public for." He did, however, say the FTC would consider reviewing standard contract terms — including a clause requiring customers to use more than 60 percent of their balance before refunds can be processed — "if problematic aspects are identified."

The FTC also announced plans to establish a 40-person priority investigation planning unit, a body to serve as a rapid-response force "swiftly conducting large-scale sweeping investigations into collusion affecting people's livelihoods." The agency also plans to create a new economic analysis bureau and a dedicated training division for investigators.

On the question of abolishing the FTC's exclusive right to refer antitrust cases to prosecutors — a power that currently means collusion and other fair trade cases can only be prosecuted if the FTC initiates a referral — Ju said the agency was considering extending direct referral rights to regional governments, while implementing procedures to deliberate on the necessity of referrals. President Lee Jae Myung, who was briefed on related proposals at a Cabinet meeting in March, said, "The option of giving local governments direct referral rights should also be reviewed."

Ju also said the FTC planned to introduce structural remedies — including orders to split companies, divest shares or transfer business units — against firms found to have violated the Fair Trade Act through cartels or other means, with implementation targeted for the second half of this year. The agency is also pursuing legislation to extend the statute of limitations for Fair Trade Act violations from a maximum of 12 years to 15 years. In the year since the Lee administration took office, the FTC has imposed a total of 2 trillion won in fines on companies for collusion and other violations, six times the average for the preceding three years.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

AHN HYO-SEONG  [[email protected]]