Coupang Rejects Fair Trade Commission’s Allegations of Preferential Treatment

[비즈니스포스트] Coupang flatly rejected the Fair Trading Commission’s claim that it gave preferential treatment to its own brand products.

Coupang said in a statement on the 23rd, “The Fair Trade Commission talks about the meaning of this event as if it were a favorable treatment for its own brand, but the meaning of this event really raises the question of how which results are presented at. all distributors.” “Showing the products you want the way you want is the essence of the distribution business, and every distributor, whether online or offline, operates this in one way,” he said.

Fair Trade Commission Chairman Han Ki-jeong appeared on KBS’s ‘Sunday Diagnosis’ on the 21st and expressed his opinion that it is inappropriate that Coupang forced its employees to write reviews about its own brand products and send them at the top of the search rankings as a form of favorable treatment for the company.

Coupang said, “In this case, the Fair Trade Commission is raising the issue of ‘algorithmic manipulation’ in showing consumers the products they most want,” and added, ” There is no country in the world that regulates the nature of this distribution business.”

Coupang cited the results that came up when searching for an iPhone or cosmetics as an example that contradicts the claims of the Fair Trade Commission.

When you search for an iPhone on Coupang, ‘New iPhone’ will be searched first. The Fair Trading Commission believes this is algorithmic manipulation, but Coupang sees no problem in showing users the products they want the most.

The Fair Trade Commission also believes that Coupang’s priority of featuring genuine and seasonal cosmetics is a problem. The algorithm is also known to be manipulated by introducing products with the lowest price and fastest delivery to customers first.

Coupang said, “If mechanical neutrality is implemented on the search results of distributors as stated by the Fair Trading Commission, it will be difficult for consumers to find the results they want, and it will be inevitable that it will be difficult for new companies to enter the market and for. small and medium-sized companies for sale.” He said, “There is not a single country in the world that demands the independence needed for search services like Naver.”

They also argued that applying the rules only to Coupang’s own brand products is reverse discrimination.

Coupang said, “Nine out of 10 popular self-branded products in supermarkets control the ‘golden zone’ where sales rise by up to four times, but the Fair Trading Commission only raising the issue of Coupang’s own brand exposure online. ” He criticized, “They only manage Coupang, which accounts for 5% of their own brand sales, with double standards, leaving alone large supermarkets with 30% of sales. “

According to Coupang, the share of Costco, E-Mart, and Lotte Mart own brand sales from 2022 to 2023 is 32%, 20%, and 15%, respectively. Coupang generated only 5% of total sales from its own brand in the same period.

Coupang also rejected the position of the Fair Trade Commission which is believed to have made huge profits through favorable treatment of its own brand.

Coupang said, “During the spread of the corona virus, when the price of masks from other companies went up to more than 10,000 won per piece, Coupang froze the price of Bache brand masks and lost 50 billion won. “We are suffering a loss of more than 60 billion,” he said.

Regarding the suspicion that Coupang engaged its executives and employees to handle reviews of its own brand products, the company said that was not true.

Coupang said, “Coupang operates the ‘Coupang Experience Group’ transparently and legally to introduce its own brand products to small and medium-sized businesses that find it difficult to survive due to the market control of large corporations, and this is clearly stated to customers. “We are clearly notifying customers about this,” he said.

The Fair Trading Commission is investigating allegations of preferential treatment of Coupang’s own brand products following a report by People’s Solidarity for Participatory Democracy in 2022. The policy is to hold a plenary meeting in May to jointly to close the level of sanctions.

Coupang said, “We will do the facts and provide an active explanation through a plenary meeting.” Narrator Nam Hee-heon