Conflict between Coupang and the Fair Trade Commission: Conflict between fair competition and innovative services
Haebom
Today, a serious conflict broke out between Coupang, Korea's largest online shopping mall, and the government's Fair Trade Commission (hereinafter referred to as the Fair Trade Commission). This conflict arose when two important factors collided: fair competition in the online market and provision of innovative services. In this column, we will objectively summarize the background of this conflict and the positions of both sides.
Coupang is Korea's largest online shopping mall, and is gaining great popularity among consumers with its rocket delivery service that quickly delivers a variety of products at low prices. Rapid growth has resulted in a significant increase in market share, creating competition from many smaller stores. Along with this growth, Coupang's market dominance also increased, attracting the attention of the Fair Trade Commission.
Role of the Fair Trade Commission
The Fair Trade Commission is responsible for promoting fair market competition and protecting consumers. We implement various regulatory measures to prevent abuse of monopoly positions or unfair trading practices in the market. Recently, the Fair Trade Commission has raised issues related to Coupang's monopoly position, claiming that Coupang is dominating the market in unfair ways.
The Fair Trade Commission argues that Coupang's act of exposing its own brand (PB) products at the top of search rankings is fundamentally different from the act of displaying products in specific locations in offline stores. Offline stores only have a prominent location for display, and that location has nothing to do with ranking. On the other hand, search rankings on online platforms indicate product excellence, such as sales volume and consumer satisfaction.
Unfair action
Coupang, as an online platform and product seller, was pointed out as a problem for exposing its own products in search rankings ahead of brokerage products. Additionally, Coupang's act of manipulating search rankings by having its executives and employees write purchase reviews of its products was considered an unfair means of competition.
Comparison with international cases
EU competition authorities have sanctioned Amazon for exposing its products first to the 'BUY BOX', and the US FTC and 17 states have banned Amazon from placing products sold at lower prices on other online platforms at the bottom of search results. A lawsuit was filed for the action. Through this, the Fair Trade Commission is emphasizing that Coupang's actions are an unfair practice that is also problematic internationally.
3. Coupang’s position
The importance of rocket delivery service
Coupang has invested tens of trillions of won every year to purchase Rocket Delivery products directly, deliver them quickly, and provide a free return service. Consumers choose Coupang to use this differentiated rocket delivery service. Coupang claims that it is natural to recommend Rocket Delivery products.
Maintain investment and service
Coupang argues that if the Fair Trade Commission's sanctions make it difficult to recommend and sell rocket delivery products, it will become difficult to maintain these services and will inevitably cause inconvenience and damage to consumers. If the Fair Trade Commission's measures continue, Coupang's position is that it will have no choice but to stop investing 3 trillion won in logistics to provide 100% free delivery to all citizens and 22 trillion won in investments to purchase rocket delivery products.
Excessive sanctions and equity issues
Coupang argues that the Fair Trade Commission's sanctions are excessive and hinder its ability to provide innovative services. In particular, we express regret over the Fair Trade Commission's decision to impose fines and criminal charges for Coupang's actions, and plan to actively explain the unfairness in court through administrative litigation.
4. Conclusion and implications
The conflict between Coupang and the Fair Trade Commission arose from the conflict between two important factors: fair competition in the online market and provision of innovative services. While the Fair Trade Commission emphasizes fair competition and consumer protection in the market, Coupang emphasizes its innovative services and maintenance of investment. A solution to this conflict will be sought through ongoing discussions and legal procedures.
From this conflict, we can gain the following implications:
1.
Importance of fair competition: Fair competition in the market provides consumers with a variety of choices and promotes healthy growth of the overall market.
2.
Value of innovative services: Innovative services are an important element that provides new value to consumers and increases a company's competitiveness.
3.
Balanced regulation: Balanced regulation is needed to resolve conflicts between regulators and businesses. Excessive regulation can hinder corporate innovation, and insufficient regulation can cause unfair competition.
Ultimately, it is important to establish a market environment that balances fair competition and innovative service provision. To this end, constructive dialogue and cooperation between the Fair Trade Commission and companies are needed. Based on the lessons learned from resolving this conflict, we hope to create a fairer and more innovative market.
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풍화된 라임 언덕
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Haebom
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