Kim Beom-seok, chair of Coupang’s board, poses in front of the New York Stock Exchange. [Photo=Coupang]
South Korea’s Fair Trade Commission has designated Coupang Inc. Chair Kim Beom-seok as the company’s “same person,” or controlling figure, replacing the current designation of the corporation itself. The FTC said the key factor was its view that Kim’s younger brother, Kim Yu-seok, is involved in management. With tighter scrutiny of governance and multiple ongoing FTC probes, Coupang now faces a major regulatory test.
On April 29, industry officials said the change was driven largely by the FTC’s assessment of Kim Yu-seok’s role inside the company.
When the FTC first classified Coupang as a large business group subject to disclosure in 2021, it still designated the corporation as the controlling entity. The agency viewed Kim Beom-seok as effectively controlling Coupang, but said there was no precedent for naming a foreign national as the group head and that enforcement of sanctions such as rules on self-dealing would be less effective in such cases.
In May 2024, the FTC revised and implemented an enforcement decree under the Monopoly Regulation and Fair Trade Act to set conditions for exceptions allowing a corporate entity to be designated. The FTC had considered Coupang to meet those conditions. However, during a National Assembly hearing last year, the FTC concluded the exception no longer applied, citing that Kim Yu-seok held the title of vice president. The agency said this meant Coupang failed conditions such as having no relatives participating in management of domestic affiliates, which are intended to reduce concerns about self-dealing. The FTC is also reported to have confirmed Kim Yu-seok’s status through on-site inspections, including checking compensation of other registered executives.
Choi Jang-gwan, director general of the FTC’s Bureau of Corporate Group Supervision, said at a briefing that what matters is not “formal aspects” such as title or pay, but whether the person is substantively involved in management and has compensation comparable to registered executives. He said Coupang has internal tiers that determine who can join key decision-making, and that Kim Yu-seok was “almost at the top level.”
With the designation changed, regulatory oversight of Coupang’s governance is expected to increase sharply. Disclosure requirements will expand, including information on overseas affiliates. Once a year, Coupang must disclose general and shareholder information for foreign affiliates in which Kim Beom-seok and his relatives together hold at least 20% of total issued shares. Coupang must submit related materials to authorities by the end of next month.
The change is also expected to bring Coupang under Article 47 of the fair trade law, which bans providing unfair benefits to related parties, often described as restrictions on self-dealing. Previously, because the corporation was designated, the rule was not applied. With Kim designated as the controlling person, regulators are expected to closely examine whether the family uses affiliates to provide business opportunities or improper benefits on favorable terms to companies controlled by relatives.
Analysts also said pressure on Kim, as the group’s de facto controller, to shoulder broader social responsibility could intensify. They said it would be harder to refuse requests to appear at the National Assembly when major issues arise, such as serious safety accidents or labor disputes, and that scrutiny is likely to increase.
With the designation process completed, the FTC may also accelerate sanction deliberations in major pending Coupang cases. The FTC is reviewing allegations involving Wow Membership tying practices and claims that Coupang Eats demanded most-favored treatment.
On April 29, industry officials said the change was driven largely by the FTC’s assessment of Kim Yu-seok’s role inside the company.
When the FTC first classified Coupang as a large business group subject to disclosure in 2021, it still designated the corporation as the controlling entity. The agency viewed Kim Beom-seok as effectively controlling Coupang, but said there was no precedent for naming a foreign national as the group head and that enforcement of sanctions such as rules on self-dealing would be less effective in such cases.
In May 2024, the FTC revised and implemented an enforcement decree under the Monopoly Regulation and Fair Trade Act to set conditions for exceptions allowing a corporate entity to be designated. The FTC had considered Coupang to meet those conditions. However, during a National Assembly hearing last year, the FTC concluded the exception no longer applied, citing that Kim Yu-seok held the title of vice president. The agency said this meant Coupang failed conditions such as having no relatives participating in management of domestic affiliates, which are intended to reduce concerns about self-dealing. The FTC is also reported to have confirmed Kim Yu-seok’s status through on-site inspections, including checking compensation of other registered executives.
Choi Jang-gwan, director general of the FTC’s Bureau of Corporate Group Supervision, said at a briefing that what matters is not “formal aspects” such as title or pay, but whether the person is substantively involved in management and has compensation comparable to registered executives. He said Coupang has internal tiers that determine who can join key decision-making, and that Kim Yu-seok was “almost at the top level.”
With the designation changed, regulatory oversight of Coupang’s governance is expected to increase sharply. Disclosure requirements will expand, including information on overseas affiliates. Once a year, Coupang must disclose general and shareholder information for foreign affiliates in which Kim Beom-seok and his relatives together hold at least 20% of total issued shares. Coupang must submit related materials to authorities by the end of next month.
The change is also expected to bring Coupang under Article 47 of the fair trade law, which bans providing unfair benefits to related parties, often described as restrictions on self-dealing. Previously, because the corporation was designated, the rule was not applied. With Kim designated as the controlling person, regulators are expected to closely examine whether the family uses affiliates to provide business opportunities or improper benefits on favorable terms to companies controlled by relatives.
Analysts also said pressure on Kim, as the group’s de facto controller, to shoulder broader social responsibility could intensify. They said it would be harder to refuse requests to appear at the National Assembly when major issues arise, such as serious safety accidents or labor disputes, and that scrutiny is likely to increase.
With the designation process completed, the FTC may also accelerate sanction deliberations in major pending Coupang cases. The FTC is reviewing allegations involving Wow Membership tying practices and claims that Coupang Eats demanded most-favored treatment.
* This article has been translated by AI.
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