What: Korean e-commerce discounter Coupang has been caught red-handed manipulating product reviews

Why it is important: The scale of the manipulation is astounding, and by the time it was discovered, Coupang has been able to eat quite a large marketshare. 

South Korea's Fair Trade Commission (FTC) has imposed a significant fine of 140 billion won (approximately $102 million) on Coupang, a major e-commerce company, for engaging in unfair business practices. These practices include manipulating search algorithms to favor its own private-label products and generating false product reviews to enhance sales. This manipulation has been ongoing since February 2019 and has involved prioritizing at least 64,250 product types, resulting in a 76% increase in sales of these items. Additionally, Coupang mobilized 2,297 employees to write 72,614 favorable reviews for 7,342 private-label products, thereby skewing product visibility and misleading consumers. The FTC has criticized these actions for undermining consumer choice and distorting fair market competition. In response, the FTC has not only fined Coupang but also referred the company and its subsidiary, Coupang Private Label Brands (CPLB), for further legal action. CPLB, established in July 2020, specifically manages the sales of Coupang’s private brand items. The regulatory body has also mandated corrective measures to rectify these unfair practices, emphasizing a strict stance against such deceptive behavior in the market.

Coupang fined US$102 million for manipulating search algorithm