FTC Launches On-Site Investigation at Coupang a Week After "Empty-Handed Withdrawal"... Requests 10 Years of Records Ahead of Injunction Hearing (Comprehensive)

Nearly Half the Market Monitoring Bureau Mobilized, Ten Years of Records Demanded
Unprecedented Intensity Spurs Talk of 'Retaliation'

Just one week after Coupang fully refused an on-site investigation by the Fair Trade Commission (FTC), the FTC dispatched around 30 investigators from its Market Monitoring Bureau for a renewed probe. The move, coming just a day before the court was set to review an injunction motion to suspend an on-site investigation related to violations of the Distribution Industry Fair Trade Act, has led industry insiders to describe this as an unprecedented, retaliatory action. However, the FTC drew a line, stating that it did not change the legal basis to circumvent procedural issues, but instead is investigating alleged Fair Trade Act violations, which they have been preparing separately for some time.

According to authorities and the distribution industry on September 1, the FTC dispatched around 30 investigators from the Market Monitoring Bureau to Coupang’s headquarters in Jayang-dong, Gwangjin-gu, Seoul, to conduct an intensive on-site investigation. It is considered highly unusual for such a large number of investigators—nearly half of the bureau's total personnel—to be mobilized at once for a probe into a single company. The FTC's investigation is focused on Coupang's alleged abuse of its market-dominant position and obstruction of business activities by other companies, all in violation of the Fair Trade Act.

Within the industry, this latest investigation is seen as a forceful pressure tactic following the collapse of the previous probe. The FTC’s Transaction Investigation Division (under the Franchise and Distribution Review Office) had attempted an on-site investigation from August 19 to 24, probing allegations that Coupang unfairly shifted the cost of discount coupons to its suppliers—a violation of the Distribution Industry Fair Trade Act. However, Coupang blocked access by pointing out that there had been no written notification seven days in advance, as required under the Administrative Investigation Procedures Act. Coupang then filed both a lawsuit and an injunction to cancel the FTC's administrative action, and the inspection ended after four days with the unprecedented outcome of regulators withdrawing empty-handed.

Unlike the previous, failed investigation, this current probe draws on provisions of the Fair Trade Act. Unlike the Distribution Industry Fair Trade Act, an investigation under the Fair Trade Act is not subject to the prior written notification requirements of the Administrative Investigation Procedures Act. Coupang cannot raise procedural flaws in this case and has been fully cooperating, but internally there is considerable unrest. With the FTC entering Coupang’s offices just a day before the first public hearing on the injunction related to the Distribution Industry Fair Trade Act, some have characterized this as a deliberate show of force and an emotional act of retaliation.

An FTC official commented, "We did not switch tactics to bypass obstacles in the Distribution Industry Fair Trade Act probe—this is a separate case regarding suspected violations of the Fair Trade Act which the Market Monitoring Bureau has been preparing in parallel." The official added, "The request for ten years’ worth of records is because the specific suspected illegal activities began a decade ago, so it is necessary to review materials from that period." The official also explained, "The timing bears no relation to the schedule of the court’s injunction hearing; the on-site inspection was lawfully planned in advance, factoring in concerns about the destruction of evidence and other issues."

Previously, FTC Chair Joo Byungki appeared before the National Assembly’s Special Committee on Budget and Accounts on August 26 and stated that the agency would use every available means—including criminal charges and administrative fines—against Coupang for refusing to cooperate with the investigation. As tensions between the two sides reach a peak, the outcome of the injunction hearing scheduled for September 2 is expected to significantly impact the FTC’s future investigations and subsequent legal battles.

This content was produced with the assistance of AI translation services.