South Korea's watchdog names Coupang founder as controlling entity
FILE PHOTO: Coupang logo is seen in this illustration taken February 11, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
SEOUL, April 29 : South Korea's Fair Trade Commission (FTC) on Wednesday designated Kim Bom, the founder of U.S.-listed e-commerce firm Coupang, as the de facto controlling entity of the company, a move that could subject it to more strict regulatory scrutiny.
The FTC's decision came after Coupang has faced heightened regulatory attention in South Korea following a data breach last year involving some 34 million customers.
Here are some details:
• Kim Bom, a Korean-American who serves as chief executive officer and chairman of the board at Coupang, will be classified as the group's "same person," a South Korean legal term referring to the individual who effectively controls a conglomerate.
• Similar designations apply to the heads of major business groups in South Korea including Samsung Electronics Chairman Jay Y. Lee, Hyundai Motor Group Executive Chair Euisun Chung and SK Group Chairman Chey Tae-won.
• The decision follows an FTC investigation into the role of Kim's brother in the operation of Coupang's Korea unit, which it decided was sufficient for Kim's designation based on "substantive information," the agency said.
• "We believe Coupang's social responsibility will become stronger," an FTC official told a briefing.
• Coupang has expressed its objection to the designation. Kim could not be reached when the FTC tried to offer him the opportunity to express his view under its procedures, it said.
• The designation means Coupang would be subject to additional regulations under South Korea's Fair Trade Act, including disclosure requirements on intra-family transactions and rules governing holding company structures, an FTC official and legal experts said.
• "After Chairman Kim is designated as the 'same person,' Coupang would face additional regulations such as disclosure of related-party transactions and restrictions under holding company rules," said Kim Sung-jin, an attorney at Seoul-based Keystone & Legal.
• "It could also limit the economic activities of Kim's family members and companies run by relatives may be included as related parties," the attorney said.
• However, questions remain over how effectively the designation can be enforced given Coupang's status as a U.S.-listed company on the New York Stock Exchange, experts said.
• Separately, the dispute between South Korea and the U.S. centres on a probe involving Coupang, specifically its data breach and the legal scrutiny surrounding Chairman Kim Bom. U.S. officials have reportedly raised concerns about legal protections for the U.S.-listed firm and how the case is being handled in South Korea.
• This led to friction, with Washington signalling it could delay security talks unless its concerns were addressed, while Seoul insists the investigation should proceed under domestic law and be kept separate from alliance matters.
