FTC returns to Coupang Inc headquarters 8 days after failed raid, this time over antitrust violations

The Korea Fair Trade Commission has launched an on-site inspection of Coupang Inc's headquarters to investigate suspected violations of the Fair Trade Act, including alleged abuse of market dominance. The visit came eight days after investigators were turned away by the e-commerce giant, and is separate from the earlier probe into alleged violations of the Large-Scale Distribution Act.

About 30 Fair Trade Commission investigators arrived Tuesday at Coupang Inc's headquarters in Gwangjin-gu, Seoul, according to industry sources. The number of officials deployed was larger than is typical for a routine on-site inspection.

The Fair Trade Commission is examining whether Coupang Inc unlawfully interfered with the business activities of other operators in violation of the Fair Trade Act. Officials moved to conduct the on-site inspection after determining there was a risk of evidence destruction, sources said.

Coupang Inc complied with Tuesday's inspection without significant resistance, sources said. Unlike the earlier case in which investigators were forced to withdraw, the current probe targets suspected Fair Trade Act violations. Investigations under the Fair Trade Act are exempt from the Framework Act on Administrative Investigations, which generally requires written notice at least seven days before an inspection begins.

Earlier, the Fair Trade Commission made four attempts to inspect Coupang Inc's premises between Aug. 19 and Aug. 24. Those attempts were aimed at confirming allegations that Coupang Inc had violated the Large-Scale Distribution Act by improperly passing the cost of discount coupons on to suppliers.

Coupang Inc refused to cooperate each time, arguing it had not received advance notice of the inspections as required under the Framework Act on Administrative Investigations, which mandates written notification at least seven days before an inspection. It marked the first time a company under investigation had successfully blocked a Fair Trade Commission on-site inspection.

The Fair Trade Commission maintains that those earlier inspections also fell under an exception to the advance-notice requirement — namely, that prior notification can be waived when there is a risk of evidence destruction or an urgent need to conduct the inspection.

Coupang Inc filed a lawsuit on Aug. 21 seeking to nullify the Fair Trade Commission's decision to conduct the inspection and also applied for a stay of execution. A court has temporarily suspended the effect of the commission's ex officio investigation order until Sept. 23.

Fair Trade Commission Chairman Ju Byung-gi told the National Assembly's Budget and Accounts Committee on Aug. 26 that the agency was working to respond firmly to what he called an unprecedented situation. The commission is also reviewing measures including the imposition of fines in response to Coupang Inc's earlier refusal to submit to inspection.