Korea Antitrust Regulator Weighs Tougher Inspection Rules After Coupang Court Challenge

Fair Trade Commission Chairman Ju Biung-ghi said the regulator plans to examine its internal investigation rules for potential loopholes, according to a Sept. 21 report by the Korea JoongAng Daily. The comments came at a press conference in Sejong marking Ju’s first year in office.

The review follows a court decision granting Coupang’s request to halt an KFTC inspection connected to allegations that the e-commerce company passed costs associated with discounts on to suppliers, the Korea JoongAng Daily reported. A separate action paused document-submission orders involving Hanwha Group.

Ju described the interruption of the Coupang investigation as a significant problem for the regulator, while stopping short of advocating compulsory investigative authority. The KFTC is instead examining whether its existing rules can be strengthened to reduce opportunities for companies to sidestep inspections, according to the publication.

Unlike searches conducted by police or prosecutors, KFTC inspections take place with the consent of the company under investigation, Ju said, according to the Korea JoongAng Daily. He argued that a suspension lasting roughly a month can substantially undermine an inspection because of the time-sensitive nature of such inquiries.

The regulator does not currently plan to respond by adopting a special judicial police system, the newspaper reported. Ju said the agency remains focused on revising its own procedures rather than seeking criminal-investigation-style powers.

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The dispute underscores growing friction around the enforcement tools available to South Korea’s competition authority as it scrutinizes some of the country’s largest corporate groups and technology platforms.

Read more: South Korea Antitrust Regulator Pushes Back on Korean Air Bid to Ease Merger Curbs

Ju said the disrupted Coupang investigation was intended in part to protect hundreds of thousands of small businesses that transact with the online retailer, according to the Korea JoongAng Daily. He expressed regret that the inquiry had effectively been interrupted.

The issue also has an international dimension. Asked whether Coupang had been discussed during a recent trip to the US, Ju said his meetings with American officials centered on broader matters rather than individual enforcement cases, the publication reported.

In July, a US House committee accused South Korea of discriminatory treatment of Coupang and other American companies and argued that such actions conflicted with the countries’ bilateral trade commitments, according to the Korea JoongAng Daily. Ju said the KFTC could communicate its position through South Korea’s Foreign Ministry if necessary.

Ju also defended the regulator’s treatment of overseas companies, saying competition laws would continue to be applied without discrimination and with procedural safeguards. He pointed to more than 25 years of FTC enforcement involving foreign businesses and said overseas competition authorities had not raised concerns with the agency about discriminatory enforcement or procedural fairness, according to the newspaper.

The KFTC’s planned review could determine how South Korea balances companies’ ability to challenge regulatory actions in court against the agency’s contention that lengthy delays can render on-site investigations ineffective.

Source: Korea JoongAng Daily