Curbing Coupang or freeing Korean companies?

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Curbing Coupang or freeing Korean companies?

Published: 15 Jan. 2026, 00:01

Audio report: written by reporters, read by AI

Sohn Hae-yong

The author is the economy and business news editor of the JoongAng Ilbo.

Anger comes first, but there is also a lesson to be learned. Watching how Coupang has responded unilaterally to a series of controversies offers a revealing contrast with the regulatory burden long shouldered by what are often called “real” Korean companies.

Coupang trucks are seen at a logistics center in downtown Seoul on Dec. 30, 2025. [NEWS1]

Consider first the fair trade system known as the “same person designation.” Introduced in 1986, it is a regulation unique to Korea. Once a business group with assets exceeding 5 trillion won ($3.39 billion) is designated as a large conglomerate, the controlling individual must disclose in detail the shareholdings and transactions of relatives and affiliates. Even minor omissions or errors can invite criminal penalties. As deadlines approach, companies drown in paperwork covering stock ownership and family ties. Coupang, however, has been an exception. Although its founder and chairman Bom Kim is the de facto controlling shareholder, he has avoided designation because of his U.S. citizenship and concerns over trade friction. As a result, he has also sidestepped restrictions aimed at curbing private benefit extraction by controlling families and related parties.

In this photo provided by the New York Stock Exchange, Coupang Founder and CEO Bom Kim poses in front of the New York Stock Exchange facade before his company's IPO on March 11, 2021. [AP/YONHAP]

Ironically, regulation itself helped build Coupang. The Distribution Industry Development Act enacted in 2012 required large discount stores to close twice a month on designated holidays and barred them from online delivery between midnight and 10 a.m. Framed as a way to protect small neighborhood merchants, the rules instead pushed consumers to their smartphones. While Emart and Lotte Mart were constrained, Coupang seized the moment with its “Rocket Delivery” service and built a dominant logistics network. Its confident posture following a major personal data breach reflected a company that believed it had already captured the market.

Coupang’s governance structure would also be impossible under Korean law. Through Class B shares carrying 29 times the voting power of ordinary shares, Kim exercises more than 73 percent control with only about a 9 percent equity stake. This dual-class share system, prohibited under Korea’s Commercial Act, allowed Coupang to avoid threats to management control while attracting massive foreign investment. Domestic venture firms have long urged adoption of such structures to reduce hostile takeover risks, but political opposition, citing fears of abuse for hereditary succession, has repeatedly blocked reform.

What most provokes public resentment is what appears to be a selective approach: enjoying authority without bearing responsibility. In late 2020, as worker deaths mounted at Coupang facilities, Kim relinquished his official title at the Korean unit ahead of the National Assembly’s passage of the Serious Accidents Punishment Act in January 2021. More recently, Coupang executives sold large blocks of shares around the time of the latest controversy. Had Coupang been a locally listed firm, financial regulators and law enforcement would almost certainly have scrutinized trading records and communications.

There is more. When major scandals erupt, leaders of domestic conglomerates often appear before the National Assembly, absorbing public criticism in the name of social responsibility. For Kim, however, managing a U.S. corporation has effectively served as a shield against such summons. This pattern risks becoming a troubling template for global technology firms already at odds with Korean authorities over taxes, fees and personal data collection.

Korea’s government and political class now face a crossroads. One option is to tighten enforcement so that companies that are foreign in name only cannot exploit regulatory gaps. In effect, this would send a clear message that Coupang’s U.S.-style defenses do not work in Korea.

Police officers carry seized materials after completing a raid at Coupang’s headquarters office in Songpa District, Seoul, on the afternoon of Dec. 9, 2025, as part of a forced investigation into a large-scale personal data leak. [JOINT PRESS CORPS]

If Coupang emerges from this episode merely tougher and unchanged, however, the consequences could be serious. Other firms, backed by elite law firms, may respond to public outrage with legalistic defiance rather than apology or compromise. Promising startups could choose U.S. listings over Korea’s markets to escape domestic regulation. In the future, second- and third-generation heirs who acquire foreign citizenship may increasingly use the status of “American CEO” as a shield against accountability in times of crisis.

The alternative is to overhaul outdated Korean regulations to align with global standards. The idea is simple: Extend to Korean companies the same managerial freedom and efficiency that Coupang enjoys. In return, all companies earning profits in Korea would be held to the same standards of responsibility, regardless of nationality or listing venue. This approach avoids both the side effects of uneven enforcement and the risk of discouraging foreign investment or triggering trade disputes.

Emotionally, the former option is tempting. As President Lee Jae Myung has said, misconduct should make companies fear for their survival, and there is an urge to mobilize prosecutors, tax authorities and competition regulators to exact a price. Rationally, however, the latter option is more persuasive. Punishing Coupang will not by itself strengthen Korean companies’ competitiveness. Rather than pulling Coupang down into a web of regulation, lifting Korean firms out of it would do far more to revive the industrial ecosystem and secure future competitiveness.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.