The conflict over South Korea’s sanctions against Coupang for a data breach is escalating beyond a simple regulatory matter into friction across the broader US-South Korea alliance. Within the US Congress and the White House, warnings are emerging that Washington could pursue retaliatory measures, including additional tariffs, if South Korea does not back down.<\/p>\n
On the 31st (local time), CNBC reported, citing multiple congressional sources and Coupang-affiliated individuals, that the matter is spreading across the bilateral relationship. The outlet said that after speaking with roughly a dozen people familiar with the issue, both Coupang and congressional figures hope the South Korean government’s pressure campaign ends quickly.<\/p>\n
A congressional source said, “If the conflict drags on, Congress or the White House could retaliate against South Korea, including with additional tariffs.” Chris Stewart, head of Skyline Capital, a lobbying firm that has advised Coupang, said, “This is not a simple commercial dispute,” adding that if South Korea does not relent, “ultimately the president has a very powerful tool in tariffs.”<\/p>\n
House Judiciary Committee member Michael Baumgartner said, “President Trump has spoken very forcefully about fairness for American companies and not suffering unjust harm,” adding, “I think the president’s response could be significant.” Coupang is headquartered in Seattle but conducts most of its business in South Korea.<\/p>\n
Executive Branch Pressure and Section 301 Petition<\/p>\n
Demands directed at the executive branch have also continued. Senator Bernie Moreno sent a letter last week to US Trade Representative Jamieson Greer urging a formal investigation into South Korea and the imposition of additional tariffs. He argued that “South Korea has used a minor incident as a pretext for the broad weaponization against an American company.”<\/p>\n
In January, Coupang investors Greenoaks Capital Partners and Altimeter Capital petitioned for an investigation under Section 301 of the Trade Act. They requested that the US government investigate whether South Korea discriminated against Coupang and assess the need for additional tariffs. The US government has not yet announced the opening of a formal investigation.<\/p>\n
According to FactSet, Greenoaks holds approximately 55.3 million shares, or 3.38% of outstanding shares, making it the second-largest shareholder. Altimeter had fully divested its Coupang stake as of the end of March this year, selling approximately 15.7 million shares.<\/p>\n
Parallel Tracks on Breach Scope and Fine Amount<\/p>\n
A report released in July by Republicans on the House Judiciary Committee included the company’s claim that the Coupang breach impact was minimal. Coupang asserted that a former employee actually retained information covering roughly 3,000 accounts. In contrast, the South Korean government, in a rebuttal submitted to the committee, listed 37.55 million breach victims. The discrepancy stemmed from differing methodologies for calculating “exposed data” versus “actually retained data.”<\/p>\n
The South Korean government explained that the 625 billion won (approximately $457.2 million) fine imposed in June fell well short of the legally permissible 3% of revenue. Coupang’s 2025 revenue was $34.5 billion (approximately 47.2 trillion won). The New York Times, however, reported that the fine was the largest personal data protection penalty South Korea has ever imposed on a company.<\/p>\n
Representative Baumgartner described the South Korean government’s response as “outrageous and dismissive,” saying, “Whatever happened in the data breach, nothing justified this kind of excessive punitive response.”<\/p>\n
‘Diver Deployment’ Claim and NIS Denial<\/p>\n
The report alleged that the South Korean government had Coupang hire divers to recover a laptop from a river in Shanghai belonging to a former Chinese employee involved in the breach. The committee cited as evidence Coupang memos indicating that a National Intelligence Service official directed the hiring of divers and the recovery operation, internal documents showing a request from a senior presidential national security official, and records of more than 200 calls between South Korean officials and Coupang before and after the recovery.<\/p>\n
The South Korean government flatly denied this. The South Korean Embassy in Washington said the claim was “entirely without merit,” adding that “the NIS only conducted working-level consultations regarding information sharing and prevention of further damage related to the large-scale data breach, and never coerced or directed any action.”<\/p>\n
Republican figures in Washington expressed displeasure with the South Korean government’s rebuttal. A source familiar with the thinking of members of the House Judiciary, Foreign Affairs, and Armed Services Committees described the situation as “disgraceful and shocking,” saying Congress is reviewing all options, including sanctions. The source added, “This report is too comprehensive and too full of facts to be denied. Calling us liars will only set back US-South Korea relations further.”<\/p>\n
Conflict Spreading Across the Alliance<\/p>\n
The Coupang dispute is unfolding amid broader friction in the US-South Korea alliance. President Donald Trump announced on the 16th that annual military exercises with South Korea would be scaled back. A White House official said there was no direct link between the exercise reduction and Coupang, but referenced an executive order Trump signed last year targeting foreign governments that over-regulate American technology companies, adding, “This is not a new focus or issue,” while noting that “the South Korean government is out of step with us on multiple bilateral issues.”<\/p>\n
Secretary of State Marco Rubio told the House Foreign Affairs Committee in June that some aspects of South Korea’s treatment of American companies had “affected our ability to finalize trade agreements.”<\/p>\n
South Korea is America’s seventh-largest trading partner. In renegotiating their 2025 trade agreement, the two countries secured lower tariff rates in exchange for South Korea investing $350 billion (approximately 478.5 trillion won) in US shipbuilding and national security industries and reducing regulations on American companies. However, the slow pace of South Korea’s investment implementation led to multiple tariff threats from President Trump earlier this year. In July, new import tariffs were imposed on dozens of countries, including South Korea, citing forced labor violations.<\/p>\n
Mixed Views Within Congress<\/p>\n
The congressional response is not uniform. Democrats have pointed to the company’s ties to President Trump as the reason Republicans are focused on this issue despite Coupang’s limited US business footprint. Coupang donated $1 million (approximately 1.4 billion won) to Trump’s 2024 inaugural fund, on par with Google, Meta, and Nvidia. Kevin Warsh, the current Federal Reserve Chair, served as a Coupang director from 2019 until earlier this year.<\/p>\n
Meanwhile, Democratic lawmakers from Washington state, where Coupang is headquartered, have also joined in criticizing the South Korean government. Representative Suzan DelBene said at a Ways and Means Committee hearing in January that companies including Coupang had reported that South Korea violated the anti-discrimination commitments of the 2025 trade agreement. Senator Maria Cantwell also sent a letter to the South Korean ambassador in February expressing “serious concern” over South Korea’s treatment of Coupang.<\/p>\n
Coupang spokesperson Erica Reynoso declined to comment on the possibility of tariffs or specifics of the South Korean government’s response, but said, “We regret the circumstances that led to a congressional investigation, but we acknowledge the committee’s thorough work to establish the facts,” adding, “We will continue to seek a constructive resolution that strengthens the US-South Korea alliance.”<\/p>\n","protected":false},"excerpt":{"rendered":"The conflict over South Korea’s sanctions against Coupang for a data breach is escalating beyond a simple regulatory…\n","protected":false},"author":2,"featured_media":138512,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[2577,42106,70462,426,74,70463,8665,171,70423,3239,6988,38893],"class_list":["post-138511","post","type-post","status-publish","format-standard","has-post-thumbnail","category-korea","tag-altimeter-capital","tag-bernie-moreno","tag-chris-stewart","tag-coupang","tag-donald-trump","tag-greenoaks-capital-partners","tag-jamieson-greer","tag-korean","tag-michael-baumgartner","tag-national-intelligence-service","tag-south-korean-government","tag-us-house-judiciary-committee"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/138511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=138511"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/138511\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/138512"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=138511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=138511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=138511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}