Chairman Ju Byunggi Declares: “We Will Respond to the End”
Comprehensive Legal Response to the “Seven-Day Prior Notice” Issue
The Fair Trade Commission has initiated comprehensive legal action against Coupang, which refused to undergo an on-site investigation aimed at confirming allegations of power abuse against its suppliers. These actions include criminal charges and the imposition of fines. This is the first time since the enforcement of the Act on Fair Transactions in Large-Scale Distribution that an on-site investigation by the Fair Trade Commission has been derailed due to a company’s refusal, and the Commission has defined this as an attempt to undermine public authority, announcing that it intends to impose the highest level of sanctions.
Chairman Ju Byunggi at the National Assembly Budget Committee: “An Unprecedented Case… Simultaneous Criminal Charges and Litigation”
Photo by Yonhap News Agency on the 26th at the National Assembly, Byeonggi, Chairman of the Fair Trade Commission, attends the full meeting of the Political Affairs Committee and delivers a greeting regarding the passage of the 2025 fiscal year settlement bill.
Chairman Ju Byunggi of the Fair Trade Commission attended the plenary session of the National Assembly’s Special Committee on Budget and Accounts on the 26th, where, in response to a question from Assemblyman Song Jaebong of the Democratic Party of Korea regarding Coupang’s refusal of the on-site investigation, he stated, “We are planning to file criminal charges against Coupang.” He added, “Because Coupang has filed an injunction lawsuit in court, we are also responding through legal proceedings. Given the unprecedented nature of this situation, we plan to respond rigorously.” He further emphasized, “Regarding Coupang’s refusal to cooperate with the investigation, we will file charges and, though the fines may not be high, we will impose them as well. We intend to deploy every available means at our disposal at this time.”
The Fair Trade Commission detected suspicions that Coupang unfairly passed on the costs of so-called “price-matched coupons” to suppliers, a violation under the Act on Fair Transactions in Large-Scale Distribution, and attempted to conduct four on-site investigations starting from the 19th of this month. However, Coupang blocked entry by claiming that there had been no prior notification seven days in advance as required by the Administrative Investigation Framework Act, and then filed lawsuits for the cancellation of the investigative action and for an injunction in court, leading to the definitive suspension of the on-site investigation as of the 24th.
Fair Trade Commission Directly Refutes: “Prior Notice Inevitably Leads to Evidence Destruction and Collusion”
In response to Coupang’s objections, the Fair Trade Commission released a separate statement on this day, explaining the procedural legality of its actions. The Commission clarified that investigations into violations of the Act on Fair Transactions in Large-Scale Distribution fall under “cases specially provided for by other laws” pursuant to Article 3(1) of the Administrative Investigation Framework Act, and therefore are not subject to the obligation of prior written notification. It made clear that Article 81 of the Monopoly Regulation and Fair Trade Act, which is applied mutatis mutandis to the Act on Fair Transactions in Large-Scale Distribution, only stipulates procedures for the presentation of identification and the delivery of an official investigation letter at the commencement of the on-site investigation, without any requirement for advance notice.
Furthermore, the Commission stated that even if the Administrative Investigation Framework Act were to apply, the exception stipulated under Article 17(1)(1) would be met. The Commission explained, “If large-scale distributors, who hold a superior bargaining position, are notified seven days in advance about the target and duration of the investigation, detecting any unfair transactions would become impossible due to potential data deletion, concealment, or collusion with suppliers.” The Commission highlighted that “since the enactment of the law in 2012, all investigations have been conducted without prior notification.”
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Meanwhile, as the legal battle between the Fair Trade Commission and Coupang has intensified, the National Assembly has moved to introduce legislative measures to address these institutional shortcomings. Assemblyman Lee Kangil of the Democratic Party of Korea plans to propose a bill explicitly excluding investigations into violations of the Act on Fair Transactions in Large-Scale Distribution and the Agency Transaction Act from the application of the Administrative Investigation Framework Act. Under the current law (Article 3(2)(7) of the Administrative Investigation Framework Act), investigations of violations of eight statutes under the Fair Trade Commission’s jurisdiction, such as the Monopoly Regulation and Fair Trade Act and the Subcontracting Act, are exempt from the prior notice requirement; however, some statutes, including the Act on Fair Transactions in Large-Scale Distribution and the Agency Transaction Act, have been omitted. The intent of this legislative amendment is to close this loophole and prevent companies from exploiting it to launch legal disputes.
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