E-commerce giant Coupang again came under fire from both sides of the aisle at the parliament over its refusal since August to permit an on-site inspection by the Fair Trade Commission.
At a parliamentary audit of the FTC by the National Policy Committee of the National Assembly on Monday, lawmakers stressed their commitment to taking legislative measures to prevent business entities such as Coupang from refusing government inspections.
Rep. Min Byoung-dug of the ruling Democratic Party of Korea said parliamentary action is necessary to show that the matter is being taken seriously.
"Coupang blocked FTC officials from entering its sites and asked the authorities to prove it was at risk of degradation of evidence," Min said.
"It is questionable whether such an attitude toward South Korean public authority should be tolerated."
This refers to Coupang's refusal since August to allow FTC inspectors to enter its workplace multiple times, as part of a probe into Coupang's alleged malpractice of charging sellers on its online marketplace to enable its low-pricing scheme for customers.
Min said that the FTC's failure to inspect Coupang will set a bad precedent for the industry.
"If Coupang displays such an arrogant disrespect for the FTC’s law enforcement within Korea, other retailers will likely follow suit. It would set a terrible precedent," Min said.
Rep. Park Sung-hoon of the main opposition People Power Party said that Coupang was the first company operating in South Korea to have refused an FTC inspection since the introduction of legal grounds for the authorities to do so, effective in 2012.
"Despite reaping massive profits and enjoying various benefits in Korea, Coupang hides behind the shield of being a US company whenever it is inconvenient, while failing to fulfill its responsibilities," Park said.
"It is utterly unacceptable for a company that operates in South Korean territory to disregard the nation's laws and regulatory systems. A listing on the US stock market must not guarantee special treatment that would allow a company to ignore our laws and regulations."
Under the Act on Fair Transactions in Large Retail Business and the Monopoly Regulation and Fair Trade Act, the FTC can enforce the inspection of a company.
All of the FTC's past inspections were conducted without prior notice to the inspection target, according to the FTC, based on the risk of evidence tampering.
However, Coupang cited the Framework Act on Administrative Investigations as grounds for its refusal of the FTC inspection, claiming the FTC should have given it prior notice.
Rep. Yoo Dong-soo, who chairs the National Policy Committee, said Monday that there is a need for a new law to ensure procedural justice.
FTC Chair Ju Biung-ghi said in the parliamentary audit Monday that Seoul was taking Coupang's refusal seriously, claiming its enforcement is meant to protect the rights of marginalized entities in South Korea's economy.
Ju added that the adverse impact on the public interest is "highly obvious," should the court approve an injunction to rule that the FTC's raid attempt was unlawful.
Han Dong-hoon factor
The National Policy Committee was one of the 12 standing committees that held a parliamentary audit on South Korean public sector entities Monday.
In an audit of the national police by the Security and Public Administration Committee, the focus was on a closed criminal case concerning the family of independent right-wing lawmaker Rep. Han Dong-hoon.
In the case, Han's daughter was accused of forging her academic credentials. The police launched the investigation in May 2022 but the case was closed after 20 months in December 2023 without a search operation.
During the audit, Rep. Youn Kun-young of the Democratic Party of Korea called on the police to reopen the case, claiming that the police had conducted a poor investigation because it was also investigating the family of Han, who was the justice minister at the time.
The police acknowledged the possibility that the case could be reopened.
"I believe the process was conducted in accordance with the law and established principles, but I will not rule out the possibility of a full reinvestigation should new facts come to light," said Kim Jong-chul, acting chief of the Korean National Police Agency in response to Youn's inquiry.
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