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Coupang proposes $2M to remedy unfair practices against subcontractors

Published: 10 Sep. 2025, 14:40 Updated: 10 Sep. 2025, 17:53

Coupang delivery vehicles are parked in a parking lot in Jung District, central Seoul, on June 3. [NEWS1]

Coupang has offered to stop unfair practices and provide 3 billion won ($2.16 million) in support to suppliers as part of a deal with Korea’s antitrust agency to avoid formal punishment over accusations of disadvantaging subcontractors.

The Fair Trade Commission (FTC) said Wednesday it has decided to begin a remedial process in response to an application filed by Coupang and its private brand (PB) subsidiary CPLB over alleged violations of the Fair Transactions in Subcontracting Act.

The consent decree system allows a company under investigation to propose corrective measures instead of receiving a penalty for its illegal acts. If the FTC accepts the proposal after reviewing its validity and gathering feedback, the case can be closed without an official punishment.

Coupang had been under investigation for holding PB product promotions without prior agreement and cutting wholesale prices unilaterally, passing on its costs to subcontractors. In March, after the investigation began, the company submitted a request to start the remedial process, promising to hand in a corrective action plan aimed at providing relief to affected partners.

As part of the voluntary corrections, Coupang said that it will consult subcontractors before running promotional events and sign agreements specifying that Coupang will cover at least 50 percent of the promotional costs.

For future PB orders, the company will also include minimum order quantities and lead times in written agreements. Coupang will ensure that all purchase orders include signatures or official seals.

Setting overly short lead times — the period from ordering to delivery and sale — can pressure subcontractors to hold large inventories in advance, resulting in financial strain.

A Coupang delivery vehicle is parked in a parking lot in Jung District, central Seoul, on June 3. [NEWS1]

Coupang further promised "at least" 3 billion won in funds to support subcontractors. This includes covering PB development and advertising costs and organizing regular consultative meetings to hear supplier concerns.

The FTC plans to work with Coupang to finalize the corrective measures, draft a provisional agreement, collect public input and determine whether to officially approve the proposal.

An FTC official said the decision to initiate the process was made “after comprehensively considering the effectiveness of protecting subcontractors, the cost of implementing the corrective measures and the expected level of penalties.”

Separately, Coupang’s food delivery arm, Coupang Eats, has also applied for the remedial process. The unit is accused of pressuring small restaurant owners to set food prices and discounts in ways that favored the app.

During a confirmation hearing, FTC chief nominee Joo Byung-ki said that when a dominant company commits serious unfair practices, it is often "more appropriate" to go through the standard legal review process rather than the remedial route.

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.
BY AHN HYO-SEONG [[email protected]]