The Broadcasting and Communications Commission (BCC) is set to impose sanctions on Coupang for its 'kidnapping ads,' following a two-year investigation into the company's practices regarding in-app purchases by Google and Apple.
According to industry sources on October 29, the BCC has completed its fact-finding investigation into Coupang's advertising practices and plans to finalize its review and decision next month. 'Kidnapping ads' refer to advertisements that force users to navigate to the Coupang application against their will while using web pages or social media.
The BCC's predecessor, the Korea Communications Commission, conducted a review of Coupang's online advertising status and execution methods in November 2024, leading to a formal investigation that began last year.
The BCC believes that Coupang has violated the Telecommunications Business Act by significantly harming user interests to increase its product sales. If proven, the company could face fines of up to 1% of its related revenue and corrective orders.
In contrast, Coupang argues that the actions of its affiliate partners targeting commissions through its 'Coupang Partners' marketing service are independent and not directly related to the company. However, lawmakers have pointed out that the platform also bears significant responsibility for creating structural issues.
During a parliamentary audit, Lee Hoon-ki, a member of the Democratic Party, criticized the Coupang Partners program, stating, "The program itself generates a structure that produces kidnapping ads." He explained that the compensation system, which pays 3% of the purchase amount if a user buys within 24 hours of accessing through an affiliate link, inevitably leads to an increase in such ads.
The current Telecommunications Business Act only prohibits certain types of ads, such as 'floating ads' that obscure the screen and reduce readability, leaving limitations in directly penalizing the new form of kidnapping ads that force app execution against user consent.
To address this, discussions on legal amendments are underway in the National Assembly. In May, lawmakers Jo In-cheol and Kim Hyun proposed amendments to the Telecommunications Business Act to explicitly prohibit actions that force users to navigate to specific apps or websites without their voluntary choice.
The proposed amendments aim to strictly ban inducements and forced connections that infringe on users' rights to know and choose, providing a legal basis for sanctions against platform operators that neglect or encourage such practices. Lee Hoon-ki's office also plans to introduce additional amendments by the end of this year, mandating that revenues obtained from forcibly moving users be excluded from advertising performance metrics.
However, organizations such as the Korea Internet Corporations Association have expressed concerns about these legislative moves, arguing that they could stifle the autonomy of the internet ecosystem and excessively hinder legitimate digital marketing activities.
An industry insider stated, "While abusive practices like kidnapping ads must be eradicated, if the types of prohibitions in the amendments or the scope of operator management responsibilities are vaguely defined, it could dampen the entire affiliate marketing market. Imposing excessive cleansing obligations and penalties on platform operators due to the actions of a few malicious distributors could lead to 'overregulation,' necessitating careful consideration."
* This article has been translated by AI.
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