After stoking a series of controversies, including a fire at a logistics centre and poor working conditions, South Korean e-commerce giant Coupang is now facing a government investigation into alleged unfair trading practices.
The Korea Fair Trade Commission (KFTC) recently noted that Coupang might have violated the Fair Trade Law and carried out a field investigation at Coupang’s headquarters in Songpa-gu in Seoul late last month.
Coupang has allegedly manipulated its search algorithm to make its private-label products more visible than the products of other suppliers.
The company manipulated the algorithm towards prioritizing and placing its private-label products at the top of the search results while placing other products at the bottom.
The antitrust regulator is also investigating whether Coupang conducted ‘gapjil’ against suppliers. Gapjil is a Korean term referring to power harassment and abuse of power.
Coupang has allegedly required suppliers to offer their products at the lowest price and penalized those who refused to supply their products at a lower price than the supply price for other platforms.
In the field investigation, the KFTC checked the allegations that Coupang forced suppliers to purchase advertising space and excluded those who refused to do so from various benefits, including the company’s rocket delivery service.
Another allegation was that Coupang unfairly returned products to suppliers.