Crucial Ruling Expected by July 15 in Coupang Founder Bom Kim’s Regulatory Status Dispute with FTC
The legal battle surrounding Coupang founder Bom Kim’s regulatory status in South Korea is intensifying, as a Seoul court has formally requested the Fair Trade Commission (FTC) to provide a clear justification for designating him as the e-commerce giant’s “same person” or controlling figure.
During a recent hearing, the Seoul High Court expressed skepticism regarding the FTC’s shift in position, particularly following its on-site inspection of Coupang. The court pressed the antitrust regulator for concrete evidence demonstrating how Bom Kim’s younger brother, Kim Yoo-seok, a Coupang vice president, was confirmed to be actively involved in the e-commerce platform’s business management.
The FTC countered, asserting that Kim Yoo-seok’s executive position, documented participation in key decision-making processes, and direct influence over various business tasks sufficiently indicated his engagement in Coupang’s operational management.
Furthermore, the commission emphasized that such designations fall within its discretionary powers, implying its decision should be upheld.
Coupang, however, strongly contended its status as a foreign conglomerate with a distinct operational structure compared to traditional Korean chaebols. The US-listed company argued that the FTC is unduly burdening it with obligations not typically applied to international firms operating in the market.
The e-commerce giant warned that the “same person” designation could inflict severe damages, potentially necessitating the disclosure of sensitive corporate information exceeding US Securities and Exchange Commission (SEC) regulatory filing requirements. This, Coupang argued, could expose the company to significant risks, including investor class-action lawsuits.
In response, the FTC dismissed Coupang’s “foreign firm” defense, reiterating that any company operating within South Korea’s borders must adhere to local regulatory frameworks, regardless of its country of origin or listing status.
Coupang initiated legal action last month to challenge the FTC’s decision, alleging an abrupt and unfounded shift in the commission’s regulatory stance. This designation followed an extensive FTC investigation into a significant data breach incident at Coupang last year, which affected approximately 33 million users, predominantly in Korea.
Under South Korean legal definitions, the “same person” identifies the de facto controlling individual of a major business group, subjecting them and their affiliates to stringent regulatory oversight. Prominent examples include Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won, both designated as the “same person” for their respective conglomerates.
Should the court rule in favor of the FTC, Bom Kim, as Coupang’s founder, would face annual obligations to disclose his personal stock ownership, alongside that of any relatives employed by Coupang and its affiliates, both domestically and internationally, to the competition watchdog. A decisive ruling from the court is anticipated before July 15, coinciding with the expiration of the temporary suspension in Coupang’s administrative suit challenging the antitrust regulator’s designation.
hwkan
