FTC approves Coupang's corrective measures for unfair subcontractor deals
Fair trade watchdog accepted online merchant's voluntary initiatives, replacing probable fines with a much larger support package.
Coupang's logo is seen in this illustration created on Feb. 11, 2025.
REUTERS
Korea's fair trade watchdog on Tuesday approved voluntary corrective measures worth 3 billion won ($1.94 million) proposed by Coupang and its private label affiliate over unfair dealings with subcontractors.
The decision by the Fair Trade Commission (FTC) came after the watchdog's probe found that Coupang and its wholly-owned subsidiary, Coupang Private Label Brands (CPLB), had sought a consent decree to resolve the case without further legal proceedings.
According to the FTC, since 2022 the two companies had provided 314 subcontractors with contracts that omitted legally required information, and also lowered supply prices for 94 subcontractors through discount promotions that were not stipulated in their agreements.
Coupang and CPLB later proposed a set of corrective measures in March of last year, including programs worth a total of 3 billion won aimed at promoting shared growth with subcontractors.
The amount is far higher than 600 million won to 1.1 billion won in the anticipated fines from the FTC.
In detail, Coupang pledged to provide 1.05 billion won to support subcontractors' costs related to product development, manufacturing and logistics.
Coupang also plans to spend 1 billion won on advertising private label products through its website and mobile application.
Other programs include 450 million won to help subcontractors promote private label products at offline exhibitions. An additional 400 million won will be provided to support consulting services and overseas market development.
Coupang will also hold regular meetings with subcontractors to discuss cooperation on quality improvement and workplace safety.
Meanwhile, the FTC last week rejected a separate set of voluntary corrective measures proposed by Coupang in another case involving allegations that it abused its market dominance over restaurant owners and consumers. That proposal was worth 60 billion won.
Industry watchers said the rejection was apparently because Coupang's alleged violations affected a far larger number of merchants and consumers.
Yonhap
