FILE PHOTO: Harold Rogers, interim head of Coupang Inc.'s Korea operations, centre, speaks to a member of the media as he arrives at Seoul Metropolitan Police Agency in Seoul, South Korea, on Friday, Jan. 30, 2026. Executives at multinational companies in Seoul argue that the all-of-government response has gone well beyond past precedent, raising concerns about proportionality, predictability and regulatory consistency. - Bloomberg
SEOUL: The Korean government's sweeping investigation into Coupang over its massive data breach is heightening unease among foreign companies, with business executives warning that the scale and tone of the probe are unprecedented, even given the seriousness of the incident, and could undermine Seoul's push to attract foreign investment.
The breach, disclosed in November, exposed the personal information of nearly all of Coupang's 33.7 million users, affecting close to three-quarters of the nation's population.
Given how deeply the platform is embedded in daily life — from groceries and household essentials to food delivery and streaming — the incident has triggered unusually strong public backlash and political pressure.
Executives at multinational companies in Seoul acknowledge that the scale of the breach warrants firm regulatory action. However, they argue that the all-of-government response has gone well beyond past precedent, raising concerns about proportionality, predictability and regulatory consistency.
"The anger is understandable because Coupang is not just another platform — it is part of everyday life in Korea," said an official at the Seoul office of a global technology company, who requested anonymity. "But even accounting for that, the breadth of the investigation is exceptional."
Hundreds of officials from nine government bodies — including the Ministry of Science and ICT, the Personal Information Protection Commission, the Seoul Metropolitan Police Agency, the Financial Supervisory Service, the National Tax Service and the Korea Fair Trade Commission — have been mobilised in the ongoing probe.
Authorities have conducted raids on New York-listed Coupang's Seoul headquarters and publicly floated the possibility of a business suspension.
"Such a pan-government, multi-agency investigation is rare, even in large-scale cybersecurity cases," the official said.
President Lee Jae Myung has repeatedly pledged to make Korea the world's best investment destination by removing unnecessary regulations and ensuring fair competition. But foreign businesses warn that the handling of the Coupang case could send conflicting signals.
"When senior officials and lawmakers publicly single out a company by name and use emotionally charged language, it creates uncertainty," said another executive at a multinational company, who also requested anonymity. "That is what foreign companies are watching closely."
From their perspective, the government's approach contrasts sharply with how it handled previous major data breaches involving domestic firms.
Last year, all three of the nation's largest telecommunications companies — SK Telecom, KT and LG Uplus — suffered cybersecurity incidents involving sensitive customer data.
SK Telecom's breach alone exposed nearly 27 million sets of USIM information, the largest on record. Yet none of those cases prompted a comparable pan-governmental investigation.=
"The suggestion of a business suspension, delivered publicly and emotionally, is unprecedented," the official said. "It is very different from the treatment of domestic companies."
Another executive echoed the concern.
"No one is arguing that Coupang should be let off the hook," said an executive working at the Korean branch of a foreign materials company. "The concern is that enforcement has crossed into an exceptional, highly politicised response."
That perception, they warn, could weigh on Korea's investment climate.
While the government recently said declared foreign direct investment hit a record US$36.05 billion last year, state data show that actual inflows have fallen steadily, while Korean companies' overseas direct investment continues to outpace inbound capital.
"Korea's outward investment is already two to three times larger than inbound foreign investment," said Kim Dae-jong, a professor of business at Sejong University. "Handling a multinational platform case in this way risks reinforcing the perception that Korea is unpredictable for foreign firms."
Foreign companies say the Coupang case has heightened existing concerns that global firms face higher and less consistent scrutiny.
"When a foreign company gains market leadership, it is quickly framed as monopolistic or predatory," another multinational executive said. "That doesn't happen when domestic champions dominate."
From a foreign investor's perspective, executives say, the Coupang case has become a test not of enforcement, but of regulatory proportionality.
"The issue is not whether Korea regulates," the executive said. "It's whether companies can anticipate how far the response will go when something goes wrong."
Coupang logged 41 trillion won (US$28 billion) in revenue in 2024, becoming the first e-commerce platform in Korea to surpass the milestone of 40 trillion won in annual sales.
About 90 per cent of its sales were generated in Korea, underscoring the platform's reliance on and integration with the domestic market.
The company has also emerged as one of Korea's largest private-sector employers. According to recent regulatory filings, Coupang employs more than 90,000 workers in Korea and operates 227 logistics centres nationwide.
Industry estimates suggest that hundreds of thousands of additional temporary and contract workers are engaged annually across its delivery, fulfillment and logistics operations. - The Korea Herald/ANN
