Coupang fined $12.4 million for alleged manipulation of search algorithm

Seoul, June 13
The antitrust regulator said on Thursday it has decided to fine e-commerce giant Coupang 140 billion won ($12.44 million) for using unfair search algorithms and uploading false product reviews to boost sales of its own private-label items.

The Fair Trade Commission (FTC) also referred the company, as well as one of its subsidiaries, Coupang Private Label Brands (CPLB), to the prosecution for further investigation and ordered them to take corrective measures.

Coupang has used deceptive algorithms to give greater exposure to its private-label products on its platform than those of other suppliers from February 2019 up to the present date, reports Yonhap news agency.

By doing so, at least 64,250 kinds of products have been prioritised, which caused the total sales of such items to soar over 76 percent during the period.

The company was found to have mobilised 2,297 employees to write positive product reviews of private-label products from 2019 in an effort to boost their sales.

They wrote a combined 72,614 reviews of 7,342 kinds of private brand items so far, which helped those products to be exposed more easily in violation of the Monopoly Regulation and Fair Trade Act.

"Such practices have prevented customers from making reasonable choices and hampered fair market competition," the FTC said, vowing stern responses to such unfair business practices.

Established in July 2020, CPLB is Coupang's subsidiary in charge of selling private brand items.