South Korean Lawmakers Slam Coupang for Resisting KFTC Investigation

The dispute dominated discussions during a parliamentary audit of the Korea Fair Trade Commission (KFTC), where legislators questioned whether companies should be permitted to challenge on-site inspections in ways that could delay regulatory enforcement, according to a report published Monday by The Korea Times.

The confrontation follows Coupang’s refusal in August to permit KFTC investigators to conduct an inspection related to suspected breaches of South Korea’s regulations governing large retailers. The company maintained that authorities had failed to provide legally required advance notification and subsequently sought judicial intervention to halt the investigation.

That legal effort suffered a setback in September when the Seoul High Court declined to suspend the inspection, determining that a delay would carry greater consequences for the public interest than the potential benefits to Coupang, The Korea Times reported.

Coupang challenged the ruling again on Sept. 28, but the appeal did not automatically prevent regulators from proceeding with their investigation.

The company’s resistance has prompted concern among lawmakers that similar legal challenges could weaken the KFTC’s ability to investigate potential violations of competition and retail regulations.

Rep. Min Byoung-dug of the governing Democratic Party of Korea criticized Coupang’s handling of the inspection during Monday’s hearing, warning that allowing companies to obstruct regulatory access could encourage similar conduct across the retail industry.

According to The Korea Times, Min also proposed that parliamentary leaders issue a formal statement or adopt a resolution expressing opposition to Coupang’s actions.

Criticism extended across party lines. Rep. Park Sung-hoon of the opposition People Power Party questioned whether Coupang was using its status as a U.S.-listed company to challenge domestic regulatory requirements.

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Related: Coupang Faces Antitrust Pressure Over Supplier Practices

Park said the confrontation marked the first instance of a company preventing a KFTC on-site inspection under the legislation governing large retailers since that law took effect in 2012, according to the newspaper.

His remarks highlighted the growing political sensitivity surrounding the application of South Korean regulations to companies with international corporate structures.

The parliamentary criticism could translate into legislative action.

Rep. Yoo Dong-soo, also of the Democratic Party, urged leaders from both political camps to consider measures that would give the KFTC stronger authority to conduct inspections. One proposal would address companies’ ability to demand that investigators establish a risk of evidence destruction before proceeding with an inquiry.

KFTC Chairman Ju Biung-ghi defended the regulator’s position during the hearing, emphasizing the potential consequences for enforcement if companies were able to suspend investigations through court proceedings.

Ju said the public-interest implications of halting the investigation were substantial, according to The Korea Times.

The controversy presents a regulatory challenge for Coupang as it contests the procedures used by South Korean competition authorities. The company’s objections concern the legality of the inspection process, while lawmakers have focused on the broader implications for the government’s ability to enforce domestic law.

Source: The Korea Times.