Coupang sues for seven days' notice from a regulator that gave none in 701 inspections

The 701 figure comes from data the FTC gave to Rep. Seo Il-jun, a People Power Party lawmaker who sits on the National Assembly's National Policy Committee ^[2]. Six bureaus and six regional offices ran the inspections, about 58 per unit ^[3], and every one the agency planned was carried out ^[3]. From January 2023 to July this year that is roughly 16 surprise inspections a month ^[1]. The Seoul Economic Daily, which reported the data, described the missing notice as standing practice and not an exception applied to particular companies or cases ^[4]. On that record Coupang was treated like every other target. Its suit seeks to cancel the inspection decision ^[7] and goes after the practice itself ^[18].

The money behind the inspection is supplier money: the allegation is that Coupang passed its discount costs on to its suppliers ^[6]. The FTC's case for surprise is that advance word gives a company time to delete or hide records, or to coordinate its answers with executives, employees or business partners ^[5]. The framework act's seven days ^[8] would be exactly that window. The FTC's data does not split the 701 by statute, and the reporting does not put a figure on the discount costs at issue ^[2].

The main case will decide whether the inspection was lawful and whether the notice rule applies ^[16]. It can accept Coupang's reading of the exemption list ^[9], and retail-act inspections would then come with a week's written warning. It can accept the FTC's incorporation argument ^[10], and the zero-notice record continues. Or the dispute can stay in procedure for a long time. Lee Hwang, a professor at Korea University Law School, said that "if disputes break out during the investigative process before any substantive violation has even been confirmed, both companies and the FTC end up in an unnecessary war of attrition" ^[17].

I think the version of this case in which every Korean company gets a week's warning overstates what Coupang has argued. Its claim depends on one statute being absent from one list ^[9]. The FTC describes the stakes more widely. In court it said granting the suspension "could set a precedent in which a business halts an investigation itself through a suspension request, and could leave whether and when an investigation takes place to the discretion of the business" ^[11]. A main-case ruling that rejects the incorporation argument in general terms would prove me wrong, because any FTC defence resting on incorporated investigation provisions would then fail the same way.

The first round went to the agency. The Seoul High Court's Administrative Division 6-2 found that "compared with the disadvantage the decision to conduct an on-site inspection would cause the applicant, suspending its effect would have a greater impact on the public welfare" ^[14]. Coupang appealed five days later ^[2], and that appeal does not suspend the inspection again ^[15]. FTC Chairman Joo Byung-ki had earlier said of such injunction suits that "there were no problems in the investigative procedure," adding that it was "deeply regrettable that an FTC investigation has been neutralized by a company's injunction suit" ^[12]. Until the main case rules ^[16], Coupang's fight is over when the FTC may walk in, and the supplier allegation waits behind it ^[6].