In court, Coupang, which did not comply with a Korea Fair Trade Commission on-site probe last month, argued that a probe not notified in advance is unlawful. The Korea Fair Trade Commission (FTC) countered that it could not give notice before the probe due to concerns about destruction of evidence.
The Seoul High Court's Administrative Division 6-2 (High Court Judges Choi Hang-seok, Park Young-ju and Kim Min-gi) on the 2nd held a hearing on Coupang's request to suspend execution of an on-site probe carried out by the Korea Fair Trade Commission (FTC). The hearing followed Coupang's filing on the 21st asking the court to suspend the FTC's on-site probe.
That day, Coupang took issue with the on-site probe being conducted without prior notice. A Coupang attorney said, "We will seek a court ruling on the FTC's investigations into violations of the Large-scale Distribution Business Act that have customarily proceeded without prior notice," adding, "The FTC attempted to investigate without properly specifying the violations, and this investigative practice should be corrected on this occasion."
Earlier, on the 19th, the Korea Fair Trade Commission (FTC) sent Researchers to Coupang's headquarters in Gwangjin District, Seoul, to check allegations that Coupang passed the expense of "price-tailored coupons" on to suppliers. But Coupang refused, saying the probe was conducted without prior notice. Under the Framework Act on Administrative Investigations, when an administrative agency conducts an on-site probe, it must notify those surveyed in writing of the schedule at least seven days before the probe begins.
After refusing the probe, Coupang filed a lawsuit asking the court to revoke the on-site probe decision and disposition, and also sought a stay of execution. The court temporarily suspended the FTC's on-site probe until the 23rd of this month.
The Korea Fair Trade Commission (FTC), meanwhile, argued the probe was lawful, citing the same law's provision that if there are concerns about destruction of evidence, the purpose of the probe can be communicated orally at the start of the probe.
Coupang countered that there were no concerns about destruction of evidence. A Coupang attorney said, "In cases of violations of the Large-scale Distribution Business Act, objective transaction records such as contracts and settlement data remain, so the facts can be sufficiently verified through suppliers whose interests are adverse." In particular, the company said it has continuously cooperated with the probe since January this year, and there were no circumstances suggesting doubts about the authenticity of submitted materials or attempts to destroy evidence.
Coupang also argued that the Korea Fair Trade Commission (FTC), which did not consider concerns about destruction of evidence at the time of the probe, is now presenting an abstract possibility of destruction of evidence once the trial is underway.
The Korea Fair Trade Commission (FTC) questioned Coupang's very application for a stay of execution. It said that because the probe period had already expired on the 28th, even if the court grants the request to suspend execution of the on-site probe, it would have no practical effect. The FTC said, "This on-site probe ended without substantive investigation due to the applicant's refusal," adding, "During the first on-site probe in January, (Coupang) did not raise any objections."
It added, "If (the court) grants the stay of effect, other probes could also be halted through stays of execution," and "Whether and when a probe is carried out could, in effect, be swayed by the response of those surveyed businesses."
The bench asked Coupang and the Korea Fair Trade Commission (FTC) to submit additional opinions within a week and concluded the hearing. It did not mention a specific time for the decision.
Meanwhile, on the 1st, the Korea Fair Trade Commission (FTC) conducted an on-site probe of Coupang on suspicion of violating the Monopoly Regulation and Fair Trade Act. It did so by using the fact that probes into violations of the Fair Trade Act under the Framework Act on Administrative Investigations are not subject to the prior written notice rule. Coupang did not raise procedural defects and complied with the probe.