Coupang secures injunction in FTC ownership dispute

A Seoul appeals court on Tuesday issued an injunction halting the Fair Trade Commission's (FTC) decision to classify Coupang founder Bom Kim as the controlling figure of the e-commerce giant, effectively designating him as the "same person" under regulatory guidelines. This ruling suspends both the designation and the FTC's requirement for Kim to provide additional disclosure information, pending the outcome of the ongoing legal battle. The court's Administrative Division 7 granted the injunction following a request by Coupang, Kim, and other plaintiffs. The order mandates that the suspension remain in place until 30 days after the court issues a final ruling on the main lawsuit. Coupang had previously sought to delay the enforcement of the measures until the judgment became final. In its ruling, the court cited the applicants' claim of an urgent need to prevent "irreparable harm." It noted that there was no evidence suggesting the suspension would significantly affect public interest. The court also determined that the FTC's request for additional information from Kim constituted an administrative action open to judicial review. Consequently, this measure was also suspended. The FTC had revised its designation of Coupang's controlling entity in April when it released its 2026 list of large business groups subject to disclosure rules. The regulator replaced the U.S.-listed parent company, Coupang Inc., with Kim, citing his effective control over the business group through his younger brother, Kim Yoo-seok, who serves as a vice president overseeing the management of the group's Korean affiliates. According to FTC regulations, a corporation can retain the status of the designated controlling entity only if relatives of the individual who ultimately controls the group do not participate in managing its domestic affiliates. The commission concluded that Coupang no longer satisfied this criterion due to Kim Yoo-seok's involvement in the management of the Korean affiliates. Coupang challenges this interpretation, asserting that its ownership structure is fully transparent, with Coupang Inc. holding 100% of the Korean operating company. The company emphasizes that neither Kim nor his relatives hold shares in the Korean affiliates and that there is no risk of private benefits being transferred to the founder's family. Coupang initiated an administrative lawsuit to overturn the designation and requested an injunction to halt the measures during the legal proceedings. During a hearing in June, the company argued that the change would compel Kim to disclose detailed information about his relatives, including their shareholdings and roles within affiliated companies. This, Coupang claimed, would create substantial compliance burdens and potentially irreversible harm. The company also pointed to procedural and substantive flaws in the FTC's decision-making process. The FTC responded by maintaining that the designation would not result in immediate or significant harm and that foreign-controlled business groups should not face differential treatment compared to Korean conglomerates. The court had earlier temporarily suspended the FTC's measures on June 14 while evaluating the injunction request. In reaction to Tuesday’s ruling, an FTC official stated, “We will reiterate the commission’s position in the main lawsuit and respond accordingly.”