(Photo= Yonhap news)

[Alpha Biz= Reporter Kim Jisun] The Fair Trade Commission (FTC) is reportedly considering imposing a maximum fine of up to 500 billion won on Coupang, which is accused of manipulating algorithms to prioritize the exposure of its private label (PB) products at the top of search results.

Since 2021, the FTC has been conducting investigations based on self-awareness and reports from civic organizations.

According to the review report, the FTC determined that Coupang designed its algorithm to include its own PB products in the product search rankings sorted by 'Coupang Ranking' unconditionally. Furthermore, it was deemed that Coupang deceived consumers by mobilizing employees to write product reviews.

Especially considering that Coupang is the subject of algorithm manipulation, the FTC concluded that the 'related sales' subject to the fine should be calculated based on Coupang's main office sales, not the sales of the subsidiary companies supplying PB products. It is estimated that sales meeting this criterion amount to between 10 trillion and 12.5 trillion won. Given that fines of up to 4% of related sales can be imposed for inducing customers by hierarchical means, the FTC is considering imposing fines ranging from 400 billion to 500 billion won.

The FTC plans to hold plenary sessions on the 29th of this month and on the 5th of next month to confirm the sanctions. During the plenary sessions, the amount of the fine may be reduced.

Coupang stated, "It is not true that we provided preferential treatment through employee product reviews, and there was no algorithm manipulation." A Coupang official said, "We will clarify the facts and actively explain during the plenary sessions."

 

 

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