Korea has long targeted US firms like Coupang: US House report

The US House Judiciary Committee on Wednesday released an interim staff report alleging that South Korea has systematically discriminated against American-owned businesses, citing e-commerce giant Coupang as the clearest example of the practice.

The 35-page report, titled “Closed for Competition: South Korea’s Discriminatory Attacks on American-owned Businesses,” stems from a committee investigation in February to examine how Korean authorities responded to a Coupang data breach affecting 33.7 million users in Korea, during which interim CEO Harold Rogers sat for a seven-hour deposition.

“South Korea has a long history of engaging in economic discrimination against foreign companies,” the report says, characterizing it as a means of protecting local firms from American rivals through “coercive investigation tactics, overly burdensome regulatory requirements, and massive fines and penalties.”

Coupang, which the report describes as “an innovative American e-commerce company,” has been a consistent target of the Korean government.

The data breach triggered a “whole-of-government assault on Coupang,” according to the report, subjecting the company to false accusations and public portrayals as a criminal organization.

Among the most serious allegations, the report claims Korea’s National Intelligence Service directed Coupang personnel to travel to China to retrieve devices and secure sworn statements, before later denying any involvement in the recovery effort.

“Even more concerning, the South Korean government is now threatening Coupang’s interim CEO Harold L. Rogers, an American citizen, with criminal charges based on NIS’s refusal to acknowledge its role in the recovery operation,” the report says.

The NIS rejected claims last year that Coupang had conducted its internal investigation under the agency’s direction, denying it had given the company any instructions, orders or authorization beyond requesting materials.

As part of the congressional inquiry opened in February, the report cites Rogers as describing Korea as “the most difficult regulatory environment” of his career and his company’s relationship with Korean regulators as “antagonistic.”

The committee also describes the Korea Fair Trade Commission as “particularly aggressive in its attacks on American-owned businesses,” citing dawn raids and multi-day interrogations, and contends that Seoul has “weaponized digital laws and regulations” to hinder American companies, including legislation modeled on Europe’s Digital Markets Act.

The economic repercussions have been far-reaching, the committee argues, with the Korean government’s campaign contributing to a 40 percent decline in Coupang’s market capitalization and affecting US pension funds, mutual funds and individual investors alike.

Regarding Korea’s $410 million fine against Coupang last month, the report calls it disproportionate, noting it exceeds penalties imposed on Korean companies for more serious data breaches, and warns that discriminatory practices could cost the US more than $500 billion over the next decade.

In a broader sense, the report argues that Korea’s actions violate its trade obligations to the United States.

It invoked the Trump administration’s position, citing its warning that it “will not tolerate foreign efforts to engage in regulatory practices that are more burdensome and restrictive on United States companies than their own domestic companies.”