Financial Watchdog Moves to Sanction Coupang Affiliates Over Violations

The Financial Supervisory Service (FSS) is moving forward with disciplinary actions against Coupang's financial affiliates, Coupang Pay and Coupang Financial, concerning alleged legal violations. This development comes in the wake of Coupang's significant personal data breach last year, which resulted in a hefty 600 billion won fine from the Personal Information Protection Commission.

Sources in the financial sector indicate that the FSS plans to send an "opinion letter" to Coupang Pay and Coupang Financial as early as this week. This document will outline the violations and irregularities discovered during the FSS's investigation. Coupang Pay, Coupang's simple payment subsidiary, is under scrutiny for its role in the payment information leak. Since Coupang and Coupang Pay operate under an integrated account system, users can access Coupang Pay services without separate registration, leading to the sharing of user and transaction data.

The FSS investigation is examining the extent to which personal and credit information was shared and utilized between Coupang and Coupang Pay following the data breach, and whether the consent procedures were legally compliant. For Coupang Financial, the focus is on its loan product, "Coupang Seller Growth Loan," offered to online merchants on the Coupang platform. This loan provides up to 50 million won at high interest rates, averaging 14.1% annually.

The FSS is investigating whether Coupang Financial exploited its platform's dominant position to impose excessive interest rates on merchants. Additionally, the agency is scrutinizing the process of providing funds using sales proceeds as collateral, while classifying these as personal loans. Following the issuance of the opinion letter and the companies' response, the FSS will issue a preliminary notice of sanctions. The final disciplinary measures will be determined after review by the Sanctions Deliberation Committee and approval by the Financial Services Commission, with the FSS aiming to complete the entire process by the end of the year.