Coupang, an e-commerce company accused of manipulating search rankings and using employee reviews to boost its private brand (PB) products, is expected to face a fine of around 160 billion won, according to a Chosunilbo report on Aug. 5.
The Korea Fair Trade Commission (KFTC) plans to issue its final ruling on Coupang’s fair trade violations this week, setting the fine at 160 billion won, which exceeds the initially reported 140 billion won by over 20 billion won.
In June, the KFTC announced a 140 billion won fine for algorithm manipulation and other infractions, covering illegal activities from 2019 to July last year.
However, Coupang reportedly continued its problematic practices regarding product listings and employee reviews even after July last year. Following the KFTC’s announcement, Coupang has maintained that “the commission misunderstood normal industry practices as illegal.”
As a result, the KFTC will impose an additional fine of about 20 billion won for sales from August last year to June this year. The KFTC is also expected to issue a corrective order, instructing Coupang to stop illegal algorithm manipulation and the unauthorized use of employee reviews.
Coupang faces two main allegations of unfair trade. First, it is suspected of manipulating algorithms to unfairly boost the rankings of its 60,000 private brand and direct-purchase products while discriminating against over 200,000 other merchants’ products. Coupang’s ranking system reportedly operates in three stages. The first two stages rank products based on objective criteria such as sales volume, price, and number of reviews. However, in the final stage, the rankings are allegedly manipulated to favor only Coupang’s PB products, according to the KFTC investigation.
Coupang is also accused of mobilizing its 2,000 employees to write at least 70,000 reviews for its PB products. The KFTC concluded that these employees gave an average rating of 4.8 out of 5 stars, deceiving consumers.
