Fair Trade Commission Chairman Joo Byung-ki warned that Coupang must "act responsibly in line with its weight class," criticizing the e-commerce giant for refusing an on-site inspection by the antitrust regulator. He also suggested that companies could be deterred from blocking investigations by raising enforcement fines or penalties to as much as 1% of revenue, even without granting the agency compulsory investigative powers.
Speaking on KBS's "Sunday Diagnosis Live" on the 25th, Joo said, "Coupang is no longer a lightweight. It is a heavyweight company that represents South Korea." He added, "When a heavyweight fighter exercises market power, it is like a deadly weapon to small merchants." Joo said, "Monitoring to prevent such conduct is the FTC's duty, and administrative investigation is the starting point of that monitoring." He explained that the commission has sent an examination report calling for a fine over obstruction of its investigation, and that deliberation procedures are now under way.
The FTC had attempted an on-site inspection of Coupang around August to verify allegations that the company passed the cost of discount coupons offered to consumers on to its suppliers. Coupang declined to cooperate, citing the absence of the seven-day advance notice required under the Framework Act on Administrative Investigations. The FTC's position is that the Act on Fair Transactions in Large Retail Business, which provides the legal basis for the inspection, does not set out separate investigative procedures and instead applies the investigation provisions of the Fair Trade Act, meaning there is no obligation to give advance notice. The Framework Act on Administrative Investigations also allows advance notice to be waived if notifying a company in advance raises concerns that evidence could be destroyed. After Coupang refused the on-site inspection while under suspicion of unfair practices against small merchants, some politicians went so far as to call for strengthening the FTC's investigative powers.
Joo, however, said compulsory investigative powers are not necessary. "Most businesses cooperate with the FTC's administrative investigations," he said. "Our current administrative investigation powers alone are sufficient for law enforcement." He added, "If a company refuses an investigation, it would be more effective for enforcement to strengthen penalties so that they are not a slap on the wrist — for example, imposing a fine at the level of 1% of total revenue."
Responding to repeated U.S. complaints that American companies face discrimination, Joo stressed that "the FTC's law enforcement does not discriminate by country." He said, "The law is enforced without discrimination against all countries," adding that "if you compare past penalty rates, they are in fact higher for domestic companies." The larger penalty amounts imposed on foreign companies simply reflect their larger revenue, he said, while the actual severity of sanctions has been applied more strongly to Korean firms.
On the recent leak of FTC investigation information to Hanwha Group, Joo said, "It has not yet been confirmed and is under internal audit," adding that "we are operating various mechanisms and systems to prevent leaks of investigation information."