Coupang Fines, Criminal Complaints, and Investigations Simultaneous... Experts Call for "Regulatory Overlap Cleanup"

Recently, experts expressed concern over the overlapping regulatory measures targeting Coupang, an e-commerce company, including self-preference sanctions, same-person designation regulations, and personal information leakage controls. Some analyses also pointed out that the basis for such overlapping regulations is weak and their control effects remain unclear.

Experts from various fields attending the 'Platform Company Regulation Assessment and Alternatives' policy seminar held by the Free Enterprise Institute and Good Regulation Citizen Forum on the afternoon of the 4th highlighted problems with the government's practice of overlapping regulations.

Lee Byeong-tae, professor emeritus at KAIST Business School, recently characterized the Coupang incident not as a matter of individual corporate illegality but as a systemic regulatory issue. Professor Lee noted that placing high-margin private label (PB) products on easily accessible shelves is a common practice even in offline retail, and that sanctions were imposed based solely on the appearance of the act without evidence of negative impact on consumer welfare.

Professor Lee also identified problems with the Korea Fair Trade Commission's authority structure, where an institutional investor handles investigations and rulings, and pointed out that the same-person designation system, originally designed for chaebol regulation, is being applied even to Coupang Inc., a U.S.-listed company Lee Sa-hoe (Chairman).

To address these issues, Professor Lee proposed shifting regulatory judgment criteria from conduct to effects. He suggested abandoning the EU-style pre-designation approach and returning to a post-event system that empirically demonstrates actual anti-competitive effects and reductions in consumer welfare.

Professor Lee also presented improvement measures including: separating the Korea Fair Trade Commission's investigation and ruling organizations; explicitly codifying the right to legal counsel presence and privilege of confidentiality; abolishing the same-person designation system; and converting over 2,200 managerial criminal penalty provisions into fines, administrative penalties, and civil liability.

Ji In-yeop from Dongguk University Gyeong Je-hak-gwa (Prof.) verified pre-regulation outcomes through empirical research. Professor Ji's analysis of 1,034 startup investments across 27 EU countries showed that after the Digital Markets Act (DMA) implementation, new startups and investment scales decreased, with estimated declines in European service industry revenues ranging from 0.05% to 0.64%. More than 86% of Apple's fee reduction benefits went to developers outside the EU.

Professor Ji explained, "Since platform fees, prices, search visibility, and payment form a single pricing structure, prohibiting specific behaviors does not necessarily pass those benefits directly to consumers." He added, "The existence of market failure and the conclusion that pre-regulation is the best response are separate issues."

Jeong Hoi-sang from Kangwon National University's School of Je Hak-jeon-gong (Prof.) pointed out that the welfare effects of the four behaviors prohibited by the Online Platform Law are minimal. According to Professor Jeong, self-preference can lead to price reductions when platforms have strong bargaining power, and bundling can promote competition through discounted packages and new market entry.

Professor Jeong also cited the Supreme Court's final acquittal in the Yogiyo lowest-price guarantee case and the remand case of the Naver incident, stating, "It is preferable for the Korea Fair Trade Commission to impose sanctions retrospectively only when it can prove anti-competitive effects."

Kim Ju-chan, professor of Public Administration at Kwangwoon University, stated, "Regulation should not aim to control companies but to increase national welfare," adding, "There must be a principle that regulates specific harms rather than targeting particular companies or business models." He further presented conditions for good regulation including net public benefit, scientific evidence, prevention of overlap, minimal infringement, and innovation promotion.

Professor Kim viewed algorithmic regulations as needing to target consumer deception and actual competitive exclusion rather than self-preference itself, and suggested that early morning delivery should be regulated by directly addressing working hours and health risks rather than delivery times. He also criticized the Korea Fair Trade Commission, Personal Information Protection Commission, and Ministry of Employment and Labor for repeatedly investigating the same factual circumstances, proposing a 'One Case-One Government' principle where investigations and document submissions occur only once, with legal judgments made separately by each institution.

Seminar participants on this day agreed that while they recognize the need to regulate consumer deception, competitive exclusion, personal information violations, and worker health risks, the justification for strong regulation must be proven not by company size but by specific harms and net public benefit.