Coupang fined US$102 million for manipulating search algorithm

South Korea’s antitrust regulator has fined e-commerce giant Coupang 140 billion won (US$102 million) for using unfair search algorithms and manipulating 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 the companies to take corrective measures.

Coupang has used” deceptive algorithms” according to the FTC, giving them greater exposure to the retailer’s private-label products on its platform ahead of those from other suppliers since February 2019.

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 per cent during the period.

The company also had 2297 employees write positive product reviews of private-label products since 2019 in an effort to boost its sales.

They wrote a combined 72,614 reviews of 7342 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.

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