E-commerce giant faces end-June ruling in data breach investigation
Coupang, a leading US-listed e-commerce platform, has initiated legal action to challenge the Fair Trade Commission’s (FTC) decision to designate its founder, Bom Kim, as the de facto controlling figure of the company. This move significantly escalates tensions between the fast-growing tech giant and Korea’s primary antitrust regulator.
The e-commerce leader formally filed a lawsuit with the Seoul High Court seeking to overturn the FTC’s recent designation and has concurrently applied for a suspension of the decision, which was announced last week.
Under Korean law, the designation of an individual as a “same person” identifies them as the de facto controller of a large business group, subjecting them to stricter regulatory oversight. If this designation stands, Bom Kim would be obligated to annually report the stock ownership status of himself and all related parties across Coupang Inc. and its numerous affiliates, both within and outside Korea, to the FTC.
This “same person” classification places Bom Kim alongside other influential figures in Korea’s top conglomerates, including Samsung Electronics Chairman Lee Jae-yong, SK Group Chairman Chey Tae-won, and Hyundai Motor Group Executive Chair Chung Euisun.
The FTC’s decision to designate Coupang Inc. CEO Bom Kim as “same person” came at the end of last month. The regulator cited the effective participation of Kim’s younger brother, Kim Yoo-seok, a Coupang vice president, in the management of the company. This announcement followed an extensive investigation into a significant data breach that impacted an estimated 33.7 million Coupang users last year.
Coupang has strongly contested the “same person” designation, emphasizing that its Korean business operations are wholly owned by Coupang Inc. The company further highlighted its transparent governance structure, asserting that the Korean Coupang entity fully owns all its subsidiaries and sub-subsidiaries.
The e-commerce firm also underscored its compliance with stringent related-party disclosure obligations mandated by the US Securities and Exchange Commission (SEC), a requirement stemming from its listing on the New York Stock Exchange. Coupang argued that Kim’s younger brother does not meet the criteria to be considered an executive under Korea’s antitrust laws and holds no shares in Coupang’s Korean affiliates.
Meanwhile, Korea’s Personal Information Protection Commission (PIPC) recently concluded its in-depth investigation into the widespread Coupang data breach. According to recent media reports, the PIPC has since communicated its investigation findings and proposed disciplinary actions to Coupang, which has reportedly submitted its dissenting opinion to the authorities.
Security industry analysts anticipate that the PIPC will disclose the final results of its investigation by the end of next month. Under current Korean legislation, companies found responsible for personal information leakage could face substantial fines, potentially up to 3 percent of their average annual sales over the preceding three years.
hwkan
