Coupang has taken legal action against South Korea's Fair Trade Commission, arguing that the antitrust regulator failed to follow advance notice procedures during an on-site inspection.
"The legal obligation to give notice seven days before an on-site inspection is a due process that protects the rights and interests of those subject to investigation," Coupang said on the 25th. "Coupang plans to seek a court ruling on the FTC's failure to comply with this procedure."
The company added that it has "fully cooperated with the Fair Trade Commission's lawful on-site inspections conducted since January this year and has thoroughly complied with all procedures required by law." Coupang is reported to have filed a suit with the court on the 21st seeking to block the FTC's inspection decision and measures.
The FTC had earlier launched an on-site inspection of Coupang's headquarters to examine allegations that the company improperly shifted the cost of its "price-matching coupons" onto suppliers. FTC investigators withdrew from the site on the 24th after Coupang refused the inspection.
Price-matching coupons automatically issue a discount when a product sold on Coupang is priced higher than at competing online retailers, lowering the amount consumers actually pay to the lowest available price. The FTC had planned to investigate whether Coupang passed on to suppliers coupon costs that the company should have borne.
The FTC maintains that the inspection falls under an exception to the advance notice requirement. Under the Framework Act on Administrative Investigations, investigators may notify the target of the purpose of an investigation verbally at the time it begins if advance notice is deemed likely to defeat the purpose of the investigation through destruction of evidence. The FTC has typically conducted on-site inspections without advance notice, citing concerns that companies could destroy evidence if they knew the schedule beforehand.
