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

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

      The court's Administrative Division 7 granted the injunction requested by Coupang, Kim, and other parties involved. 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 irreparable damage,” the court stated, indicating it found no evidence that the suspension would substantially harm the public interest.

      The injunction is in effect until 30 days after the court delivers a decision on the principal case. Although Coupang had sought a longer suspension that would remain until the final judgment, this was not granted.

      The conflict is based on a specific aspect of Korean corporate legislation without a direct English equivalent. Annually, the FTC publishes a list of large corporate groups obligated to adhere to disclosure rules, identifying for each group the "same person" or dongilin considered to be at the helm of the organization.

      For Coupang, this designation had historically included Coupang Inc., its parent company listed in New York. However, in April, the commission replaced the company with the individual.

      The FTC’s rationale was largely centered on family ties. According to the rules, a corporation can retain its designation only if relatives of the individual deemed to control the group do not participate in the management of its domestic subsidiaries. However, Kim’s younger brother, Kim Yoo-seok, serves as a vice president at Coupang and is involved in the Korean operations.

      Coupang contends that this concern is unwarranted. “Coupang has a clear ownership structure, with Coupang Inc. holding 100 percent of the Korean operating company,” the firm stated, noting that neither Kim nor his family members possess shares in the Korean affiliates, thus eliminating any potential for private benefits to be transferred to Kim's family.

      During a hearing in June, the company argued that the change would obligate Kim to reveal his relatives’ shareholdings and roles at related firms, describing this compliance requirement as challenging to rectify once implemented. They also highlighted procedural and substantive errors in the commission's decision-making process.

      The FTC maintained that no immediate or significant harm would arise from the designation and that a business group managed from overseas should not receive more lenient treatment than a Korean conglomerate.

      This argument holds considerable weight in Seoul, where the disclosure framework aims to prevent founding families from discreetly extracting value from publicly traded affiliates.

      The ruling on Tuesday did not resolve the matter completely. The court determined only that the applicants were facing urgent harm and that delaying the measure would not adversely affect the public interest, which is a criterion for an injunction, not a judgement on the case's merits.

      A notable finding from this case is that the court declared the FTC's request for additional information constitutes an administrative action subject to judicial review, allowing companies the opportunity to challenge seemingly routine information requests in court.

      The commission has also been active in other areas, notably taking action against Google regarding its conduct in the Android app store, a case involving billions of won in revenue. This is part of a broader trend where national regulators are increasingly confronting foreign-listed platforms, such as Apple's App Store in Delhi and a sideloading regulation accepted in Brazil.

      Coupang, listed in New York but primarily operating in Korea, occupies a unique position, which is essentially the stance the FTC has consistently maintained.

      The main lawsuit aimed at reversing the designation remains pending. Until it is resolved, and for one month thereafter, the legally responsible entity for Coupang’s disclosures will be the company, not an individual.