SEOUL, Feb 26 (Reuters) - South Korea's antitrust regulator said on Thursday it has fined Coupang 2.2 billion won ($1.55 million) for pressuring suppliers to cut prices and shoulder additional costs to meet profit margins, as well as for delaying payments to vendors.
The Korea Fair Trade Commission (KFTC) said the e-commerce giant violated the country's large-scale retail business law by demanding reductions in supply prices and requiring suppliers to bear advertising and other fees in order to achieve margin targets set by the company.
"As the overwhelming No.1 market leader, Coupang forced suppliers to bear sacrifices in order to maintain its profit margins and used retaliatory measures such as suspending or reducing orders when suppliers refused or were uncooperative," the regulator said in a statement.
When suppliers failed to meet targets, Coupang at times negotiated or demanded lower supply prices, and suspended or reduced orders, or implied it would do so to pressure vendors.
Coupang also set gross margin targets and required suppliers to bear additional expenses, including advertising fees, fees for its "Coupang Experience Group" programme - under which selected customers receive free or discounted products in exchange for posting product reviews - and premium data services. If margins fell short, the company used order cuts or the threat of such action as leverage, it said.
In a separate violation, the KFTC said Coupang delayed payments to suppliers in 508,752 direct purchase transactions with 25,715 vendors between October 2021 and June 2024. The total value of delayed payments amounted to about 281 billion won.
Coupang, which is due to report fourth-quarter earnings on Thursday, faces intensifying competition and regulatory headwinds after last year's massive data breach dented spending and erased nearly 35% of its share price.
($1 = 1,423.7000 won)
(Reporting by Heekyong YangEditing by Ed Davies)
