South Korean regulator probes Coupang over 'kidnapping ads'

The Korea Communications Commission (KCC) has launched an investigation into ecommerce company Coupang for alleged violations of the Telecommunications Business Act.

The probe focuses on the company’s online advertising practices and account cancellation policies.

The investigation follows complaints regarding “kidnapping ads,” which redirect users to Coupang’s app or website without their consent.

The KCC suspects these ads may breach the law and could lead to fines or corrective actions.

The agency is also reviewing Coupang’s policy requiring full account deletion to cancel individual services like Coupang Eats and Coupang Play.

Coupang says it will fully cooperate, claiming it has safeguards in place and past investigations found no wrongdoing.

🔗 Source: The Korea Times

🧠 Food for thought

1️⃣ Coupang’s regulatory challenges reflect broader e-commerce consumer protection tensions

This “kidnapping ads” investigation is the latest in a series of regulatory scrutiny Coupang has faced regarding consumer protection.

In March 2023, the Personal Information Protection Committee (PIPC) launched an investigation into Coupang following a data leak affecting over 460,000 users, highlighting concerns about the company’s data security protocols 1.

The current investigation on account cancellation restrictions mirrors a growing global trend of regulators focusing on consumer rights in digital services, particularly concerning how platforms enable users to withdraw from services.

E-commerce platforms across markets face increasing legal scrutiny regarding practices like mandatory subscriptions and exit barriers, with regulatory frameworks like the EU’s Consumer Rights Directive explicitly granting consumers a 14-day right of withdrawal 2.

The difficulty in canceling platform-specific services without terminating the entire account creates a significant friction point that regulators are increasingly viewing as a consumer rights violation.

2️⃣ Aggressive data collection practices fuel targeted advertising controversies

Coupang’s sophisticated big data infrastructure, developed across four evolutionary phases since 2010, may help explain both its advanced targeting capabilities and related regulatory concerns 3.