Coupang opts for 3 billion won co-prosperity plan over sanctions in private-brand supplier dispute

Coupang Inc and its private-brand operating subsidiary CPLB have agreed to implement a 3 billion won co-prosperity support plan in lieu of sanctions over allegations that they passed promotional costs onto suppliers and cut supply prices during private-brand subcontracting transactions.

Going forward, Coupang will be required to specify in contracts the minimum order quantity, lead time and promotional cost-sharing ratio for private-brand subcontracting deals, and suppliers' share of promotional costs will be capped at 50 percent.

The Korea Fair Trade Commission announced Tuesday that it had finalized a consent order against Coupang Inc and CPLB over alleged violations of the Subcontracting Act.

CPLB was spun off from Coupang as a separate entity in 2020 and handles the company's private-brand manufacturing outsourcing and sales operations.

The Fair Trade Commission had been investigating the two companies since October 2022 over allegations that they issued contracts to 314 subcontractors with missing mandatory disclosures or without required signatures, and that they cut supply prices for 94 subcontractors while running promotional events not stipulated in their agreements.

In response, Coupang and CPLB applied for a consent order in March 2025, proposing measures to improve subcontracting trade practices and support affected suppliers. The commission decided to open consent order proceedings in August of that year, then gathered opinions from relevant agencies and suppliers before finalizing the plan.

Under the finalized consent order, Coupang and CPLB will upgrade their systems so that suppliers can confirm order details through the "Supplier Hub" platform and affix their signatures to purchase orders.

Product-specific supplementary agreements will also codify minimum order quantities and lead times — the period from order placement through production, warehousing and the start of sales. The measures are intended to reduce uncertainty in suppliers' production and delivery processes and ease the burden of holding excess inventory.

For promotional events, the two companies must conclude separate supplementary agreements in advance that set out the cost-sharing ratio. Suppliers' share of promotional costs will be capped at 50 percent.

Alongside this, the companies will roll out a 3 billion won co-prosperity support package. Of that total, 1.05 billion won will go toward covering product development, production and delivery costs, while each of the 94 subcontractors affected by the alleged unfair pricing will receive 10 million won.

An additional 1 billion won has been earmarked for online advertising and promotional support, and 450 million won for offline marketing assistance. Another 100 million won will support high-performing suppliers, while 400 million won will fund consulting services and help suppliers break into overseas markets.

The commission said it accepted the consent order after weighing the expected improvements to trade practices and the remedial effect for affected suppliers. It noted that some suppliers had voluntarily proposed promotional events to clear inventory and boost sales, and that price cuts had affected only 94 of 504 total subcontractors, or 18.6 percent.

The decision marks the first consent order finalized under the Subcontracting Act's unfair-pricing provisions since the consent order regime was introduced under the law in July 2022. The commission said the total support package is roughly three to five times the anticipated penalty of 600 million to 1.1 billion won, and also exceeds the estimated 700 million won in price reductions imposed on suppliers.

"We will conduct quarterly checks on Coupang and CPLB's compliance with the consent order together with the Korea Fair Trade Mediation Agency," the commission said, adding that it would continue monitoring unfair subcontracting practices in the online shopping sector.