Coupang fined for own brand search engine rigging

Occurred: August 2021

A Korean competition watchdog fined e-commerce company Coupang for manipulating its search engine algorithms in favour of its own label products. 

Coupang was fined 3.29 billion won (approximately USD 2.81 million) by the country’s Fair Trade Commission (FTC) for engaging in unfair practices related to its search engine algorithms, including tampering with its search algorithms to favour its own label products over those of third parties, and forcing hundreds of sellers to reduce prices for goods sold on its platform while simultaneously increasing prices on rival platforms.

The investigation came hard on the heels of an on-the-spot inspection at the company's Seoul headquarters in Seoul following complaints by customers, civic groups and others that it had abused its market position by favouring its own brands products. 

The Financial Times noted that tampering with algorithms is common in South Korea’s e-commerce sector.

➕ In June 2021, the company's food delivery subsidiary Coupang Eats and its star rating system drew fire for mishandling a complaint that resulted in the death of a restaurant owner.

➕ In March 2022, Coupang and its subsidiary CPLB came under investigation by the FTC for getting its employees to submit false positive reviews of its own brand products.

Operator: Coupang  
Developer: Coupang  
Country: S Korea
Sector: Technology; Retail
Purpose: Rank content/search results
Technology: Search engine algorithm
Issue: Competition/price fixing
Transparency: Governance; Black box; Marketing

Page info
Type: Incident
Published: April 2022