Coupang's Kim Beom-seok Faces Criminal Sanctions for False Data Submission, Says FTC Chief

The head of South Korea's Fair Trade Commission (FTC), Joo Byung-koo, announced that Coupang Inc. Chairman Kim Beom-seok will face unavoidable criminal sanctions for submitting false data to the FTC concerning his designation as the "person in chief" (total shareholder).

Joo stated on May 26 that the FTC designated Kim as the "person in chief" because facts were discovered that violated Coupang's pledge that its principal shareholder's family members do not participate in domestic management. "We have no choice but to investigate and sanction that part," Joo said, adding that under current law, criminal sanctions, including referral for prosecution, are the only recourse for proven false submissions.

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We have no choice but to investigate and sanction that part.

Previously, the FTC had accepted a confirmation from Kim in 2024 stating that his relatives were not involved in domestic management, leading to Coupang's domestic subsidiaries being designated under the "person in chief" system. However, during an investigation this year, the FTC confirmed the involvement of Kim's younger brother, Kim Yoo-seok, in domestic management. Consequently, Coupang's "person in chief" was changed to Kim Beom-seok last month.

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Under current law, we have no choice but to rely on criminal sanctions, including referral for prosecution, for false submissions.

Furthermore, Joo announced the FTC's intention to pursue the introduction of a fixed-amount penalty for false submissions of designated data, aiming for a strong economic sanction commensurate with the violation's severity. Currently, the Fair Trade Act only prescribes criminal penalties for such offenses, which are deemed insufficient in deterring violations due to strict imposition requirements. Joo indicated that the penalty would be a fixed amount for the individual, discussed within the maximum limit of 20 billion won.

In related news, Joo mentioned plans to further expand the FTC's workforce, adding 237 personnel starting in the fourth quarter, following an increase of 167 staff this year. This expansion includes establishing a new national-level "Key Investigation Planning Group" with 40 members to focus on large business groups, platforms, and monopolistic practices affecting daily life. Joo cited recent incidents involving Coupang and complex unfair trade practices by platforms like Naver and delivery apps, as well as issues of management succession within large conglomerates, as reasons for the new group's establishment.

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We plan to pursue the introduction of a fixed-amount penalty for false submissions of designated data, aiming for strong economic sanctions commensurate with the severity of the violation.