The Seoul court has put a hold on the decision that designated Coupang's founder as its controlling individual.

      Coupang has achieved a preliminary victory against South Korea's competition authority. On Tuesday, the Seoul High Court suspended the Fair Trade Commission's (FTC) ruling that identified founder Bom Kim as the e-commerce company's controlling figure, thus temporarily halting the associated disclosure requirements while the main lawsuit is considered.

      The court’s Administrative Division 7 granted an injunction requested by Coupang, Kim, and other involved parties. It suspended both the designation and the FTC’s request for Kim to provide further details about his relatives.

      “The applicants have shown an urgent necessity to avert irreversible damage,” stated the court, noting that the suspension would not significantly harm the public interest.

      This freeze is valid until 30 days following the court's decision on the primary case. Coupang sought a longer suspension, lasting until the final judgment, but did not receive it.

      The conflict revolves around a specific aspect of Korean corporate law with no direct English equivalent. Annually, the FTC publishes a list of large corporate groups subject to disclosure regulations and identifies the "dongilin," or “same person,” perceived to be at the helm of each group.

      For Coupang, this has historically been Coupang Inc., the parent company listed in New York. However, in April, the commission replaced the company with Kim.

      The FTC’s rationale was limited and focused on familial ties. According to the rules, a corporation can retain its designation only if the relatives of the individual who ultimately controls the group are not involved in the management of its domestic affiliates. Since Kim’s younger brother, Kim Yoo-seok, is a vice president at Coupang overseeing the Korean operations, this stipulation was not met.

      Coupang countered that the concern was unfounded due to its ownership structure. "Coupang has a transparent ownership structure, with Coupang Inc. owning 100 percent of the Korean operating company,” stated the company, emphasizing that neither Kim nor his relatives have shares in the Korean affiliates, and there is no possibility for private benefits to be transferred to the founder's family.

      During a hearing in June, Coupang asserted that the new ruling would necessitate Kim to disclose his relatives' shareholdings and roles at affiliated companies, imposing a compliance burden that would be difficult to reverse. The company also pointed out procedural and substantive flaws in the commission's decision-making process.

      The FTC maintained that the designation did not lead to any immediate or significant harm and argued that a business group controlled from abroad should not receive more leniency than a domestic conglomerate. This argument holds considerable weight in Seoul, where the disclosure regime aims to prevent founding families from quietly extracting value from publicly traded affiliates.

      Tuesday’s ruling did not resolve the matter entirely. The court merely determined that the applicants faced urgent harm and that suspending the ruling would not adversely impact the public interest. This assessment pertains to the injunction rather than a final judgment on the case's merits.

      One key determination extends beyond this case: the court ruled that the FTC’s request for additional information constituted an administrative action subject to judicial review, meaning companies can now challenge seemingly standard information demands in court.

      The commission is also active in other cases, including pursuing Google regarding its conduct in the Android app store, a matter involving billions of won in revenue, part of a larger trend of national regulators confronting foreign-listed platforms, such as Apple's App Store case in Delhi and the sideloading order accepted in Brazil.

      Coupang, which is listed in New York and operates predominantly in Korea, presents a unique situation, which aligns with the FTC’s ongoing argument. The primary lawsuit aiming to completely overturn the designation is yet to be heard. Until then, and for a month afterward, the legal entity responsible for Coupang’s disclosures will be the company itself, not an individual.