FTC Launches Probe into Major Online Shopping Malls Over Unfair Practices

The Korea Fair Trade Commission (KFTC) has launched on-site investigations into major online shopping malls like Coupang and Naver, as well as specialized retail and vertical platforms such as CJ Olive Young, Asung Daiso (Daiso), Musinsa, and Lotte Hi-Mart.

This investigation focuses on verifying alleged unfair practices by these giant platforms against their suppliers. The KFTC dispatched investigators to major retail companies from April 20 to April 30, 2023, to collect data related to transactions with suppliers.

Through this investigation, the KFTC is examining whether platforms identified as 'category killers'—dominant players in specific sectors—have engaged in various unfair trade practices, including shifting promotional costs, demanding business information, forcing transactions, issues with commission rates, delayed payments, bundling private brand (PB) products, and unfair returns or delayed contract issuance.

In 2023, CJ Olive Young was fined approximately 1.9 billion won for alleged unfair practices against its suppliers, while Asung Daiso paid suppliers an average of 59.1 days after direct purchases. Last year, Coupang was fined 162.8 billion won for violations of the Fair Trade Act and the Large-scale Distribution Business Act, and Baedal Minjok and Coupang Eats also underwent related investigations.

The KFTC has announced legislative notice to increase the maximum penalty surcharge for violations based on the duration and frequency of the infringing act, from the current 50% to 100%. A KFTC official stated that they do not confirm investigation details or whether investigations are underway for specific matters or companies.