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Complaint by Coupang's U.S. investors may turn data leak probe into trade flash point

Published: 23 Jan. 2026, 16:03 Updated: 25 Jan. 2026, 16:21

The Coupang logo is seen at the company's logistics center in Seoul on Jan. 23, 2026. [YONHAP]

Coupang on Friday distanced itself from accusations from U.S. investors that Korea is engaging in discriminatory regulation against the e-commerce giant.

In a statement released the same day, the Seattle-based firm said that the submission of an international investment dispute notice by its investors was unrelated to the company itself and added that it is "fully cooperating with all government investigations."

The statement followed a petition submitted to the U.S. government by Greenoaks Capital and Altimeter Capital, two U.S.-based investment firms that hold stakes in Coupang, on Thursday.

The petition asks U.S. trade authorities to review Korea’s handling of the company's data breach for possible trade violations and to consider retaliatory action. The move comes after Korean authorities launched an investigation into Coupang in Korea after the company reported a massive data breach that compromised roughly 33.7 million users' personal information.

Original copies of petitions submitted by two U.S. firms invested in Coupang on Jan. 22, seen by the JoongAng Ilbo, are pictured. [KANG TAE-HWA]

The investors argued in the petition that Korea’s investigation into the breach amounted to discriminatory and unlawful treatment of a U.S. company. They contended that the government’s actions transformed a data security case into a broader campaign to undermine Coupang’s competitiveness.

In filings sent simultaneously to the U.S. Justice Department and the Korean government, the investors named President Lee Jae Myung and Chung Hong-sik, director general of the Ministry of Justice’s International Legal Affairs bureau, as recipients. The filings signal the investors’ intent to initiate international investment dispute settlement proceedings.

The investors described the security breach at the country’s largest online retailer, which compromised nearly the entirety of the company’s user base, as a “limited data breach.” They argued that Korean authorities used the incident as a “pretext […] to try and eliminate a successful U.S. company's ability to compete with the Korean and Chinese companies that the government favors."

They characterized the government’s investigative steps as “illegal actions” that erased billions of dollars in U.S. investment. The petition asserted that Korea had repeatedly violated the Korea–U.S. FTA and international law, giving the investors grounds to seek compensation. It estimated current losses at several hundred million dollars and projected potential losses for U.S. investors in the tens of billions.

U.S. firms invested in Coupang address Korean President Lee Jae Myung in a petition submitted to the U.S. Justice Department and its Korean equivalent. [KANG TAE-HWA]

The investors' filing comes as Coupang faces criticism in Korea from the public and lawmakers for failing to fully cooperate with authorities investigating the breach, which the company first reported in November of last year. The investors accused the government of overreach, likening its actions to those taken in "totalitarian adversaries like Venezuela or Russia.”

Coupang operates in Korea through a local unit wholly owned by its U.S.-listed parent, Coupang Inc. More than 70 percent of the parent company’s voting rights are held by its founder and chairman, Bom Kim, a U.S. citizen. More than 90 percent of the company's sales come from Korea.

Neil Mehta, a founder and partner at Greenoaks, serves on the parent company's board. Greenoaks and related entities hold more than $1.4 billion worth of Coupang shares, according to filings.

Korea’s prime minister, Kim Min-seok, who is currently in Washington for talks with U.S. officials, rejected the allegations on Friday during a luncheon with seven members of the U.S. House of Representatives, saying that the Korean government had not discriminated against the company.

“There is absolutely no discrimination against Coupang,” Kim told U.S. lawmakers, according to a statement from his office. “The U.S.–Korea relationship is based on trust, so there is no need to worry about discriminatory treatment.”

Political motives alleged

The Coupang logo is seen on a delivery truck at the company's logistics center in Seoul on Jan. 23. [YONHAP]

The investors framed the dispute in political terms, accusing President Lee and the ruling Democratic Party (DP) of embracing an "anti-U.S., pro-China stance."

The petition cited Lee’s past remarks describing U.S. Forces Korea as an "occupying force" and claimed he blamed the United States for enabling Japan’s colonial rule over Korea (1910-45), arguing that such views reflected a broader ideological shift.

The investors said that government actions they consider unlawful had long hindered Coupang’s operations, but became an "existential threat" in 2025, when Lee's election as president gave the DP unified control of government for the first time since 2022.

The filing also pointed to Cabinet and presidential appointments involving former executives from rival companies, including Han Seong-sook, minister of SMEs and startups, Chae Hwi-young, minister of culture, sports and tourism, and Ha Jung-woo, senior presidential secretary for AI future planning.

Han was formerly the CEO of Naver, Chae was a former adviser for Naver and Ha was the head of Naver's AI Innovation Center. The domestic tech powerhouse operates an online marketplace. The investors argued that these appointments created the conditions for regulatory action against Coupang.

Interim CEO of Coupang in Korea Harold Rogers, center, swears in as a witness during a parliamentary questioning session at the National Assembly in western Seoul on Dec. 30, 2025. [NEWS1]

The U.S. investors claimed that authorities exploited a breach allegedly caused by a former employee residing in China as an opportunity to dismantle the company. The petition further criticized efforts by lawmakers to summon Chairman Kim to the National Assembly, describing the move as a threat to both Coupang’s operations and Kim personally.

According to the investors, the government’s actions lacked any "plausible purpose […] other than to obstruct Coupang’s operations so fundamentally that it can no longer compete effectively with Naver and its other Korean and Chinese competitors."

Dispute over scale of breach

The investors disputed the scope of the data breach. While Korean authorities have cited exposure affecting 33.7 million customers, Coupang has claimed that only about 3,000 records were actually leaked. The investors said that although the "Chinese threat actor gained access to" millions of accounts, only a small number of data files were retained and later deleted, with no data transmitted to third parties.

Bom Kim, chairman of the board of Coupang [COUPANG]

The investors said "Coupang Inc. Chairman Kim apologized for the data breach […] in the face of this relentless campaign from the Government." They emphasized that the company provided $34 vouchers to roughly 33 million users whose data might have been exposed, even if no data was ultimately leaked, at a total cost exceeding $1 billion.

They warned that under Korean law, regulators could impose fines of up to 3 percent of a company’s average annual revenue over three years, a penalty that could exceed $800 million for Coupang. The investors argued that such a fine would be the largest of its kind in Korean history and described it as punitive and discriminatory when compared to penalties imposed on Korean and Chinese companies involved in more severe breaches.

Trade implications

The petition appears to intend to elevate the dispute from a domestic regulatory matter to an international trade conflict. Since the breach, Coupang has intensified lobbying in Washington, but the appeal to U.S. trade authorities marks a sharper escalation.

Under U.S. law, the Office of the U.S. Trade Representative must decide within 45 days whether to open an investigation. A decision to proceed would likely draw the Donald Trump administration into the dispute after months of restraint. If U.S. officials conclude that Korea violated trade obligations, they could pursue retaliatory measures, including tariffs or import restrictions.

Analysts say the case could widen scrutiny of Korea’s digital regulations, including proposals targeting online platforms and a recently enacted law aimed at curbing manipulated or false information.

While the investors accused Seoul of breaching the Korea–U.S. FTA, critics note that the pact has been effectively weakened by sweeping reciprocal tariffs imposed by U.S. President Donald Trump, raising questions about the legal basis of such claims.

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.
BY KANG TAE-HWA,KIM JU-YEON [[email protected]]