Coupang Wins Against KFTC Fine with Kim & Chang Defense... All Eyes on the Supreme Court

However, Coupang, backed by a powerful legal team, won the case at the Seoul High Court, drawing attention to the upcoming Supreme Court of Korea ruling. Coupang has requested restricted access to the court decision, citing trade secrets, thereby blocking full public disclosure of the verdict. Additionally, it has been reported that the judge previously in charge of Coupang-related lawsuits has joined Kim & Chang, the law firm representing Coupang.
3 billion KRW and the corrective order. 1 billion KRW received by Coupang from suppliers violated the Act on Fair Transactions in Large Retail Business. 4 billion KRW from 330 direct purchase suppliers as 'growth incentives.
7 billion KRW in discount costs to 388 participating companies. Through large-scale discounts, Coupang increased sales and customer traffic, while shifting the burden of these costs onto suppliers. The KFTC found Coupang’s practice of making suppliers bear 100% of the discount costs during promotional events to be illegal.
The Act on Fair Transactions in Large Retail Business stipulates that large retailers, such as Coupang, cannot require suppliers to share more than 50% of sales promotion expenses. Coupang argued that, when including advertising expenses borne by the company, the suppliers’ share did not exceed 50%. The Seoul High Court accepted Coupang’s argument.
Despite concerns that large retailers could demand additional costs not stipulated in contracts, the court stated, 'It is an issue the KFTC must uncover through investigation,' thereby placing the burden of proof on the KFTC. Currently, access to the court decision is restricted, as Coupang’s claim that it contains trade secrets has been accepted. This has led to suspicions that only details favorable to Coupang are being disclosed.
Following its victory at the High Court, there is speculation that Coupang has increased the amount collected from marketplace sellers. At a recent hearing at the National Assembly of the Republic of Korea, it was pointed out that Coupang sets lower sales prices than competitors and, when intermediary profits decrease, compensates for losses by forcing suppliers to purchase advertising or pay various fees. 1 billion KRW in sales incentives.
5% was effectively returned from suppliers. The sales promotion expense case is now awaiting a decision from the Supreme Court of Korea. Coupang has reportedly appointed six attorneys from Kim & Chang to represent the company in the Supreme Court case.
Notably, the presiding judge who ruled in favor of Coupang in the fine case later handled another Coupang lawsuit concerning algorithm manipulation. This judge retired in February last year and joined Kim & Chang, which represents Coupang, in May. Although there are post-retirement employment restrictions for judges, there is no specific rule prohibiting them from joining companies involved in cases they previously handled.
While excessive restrictions on judges’ post-retirement careers could undermine judicial independence, critics argue that there is currently no way to prevent judges from joining the legal teams of large corporations they previously ruled in favor of.
hwlee@fnnews.com Lee Hwan-joo Reporter