The House Judiciary Committee has released a scathing report highlighting alleged discriminatory practices by the South Korean government against American-owned companies.
The report details a case against Coupang, a Seattle-based U.S. company dubbed the "Amazon of Korea," which has faced intense scrutiny from the Korean government following a data breach. Coupang was recently fined a record $410 million by South Korea, the largest privacy fine in the country's history.
The Judiciary Committee outlined the timeline of how Coupang came under heavy fire from the South Korean government, from a secret laptop recovery mission to calls for the interim CEO to be charged with perjury. The committee report alleges that Coupang was instructed to retrieve the stolen data, which was stored on a laptop and at the bottom of a murky river in China, leading to a covert mission in Chinese territory.
The former employee who stole the data admitted to accessing it outside of Korea for several months, and Coupang's security team discovered the breach in November. The company was given due process throughout the investigation and retains the right to challenge the decision in court, which it has said it will do.
The Judiciary report alleges that the Korea Fair Trade Commission has been "particularly aggressive in using competition policy to attack American companies," and that South Korea has used digital laws and regulations to target American companies and limit their ability to operate successfully in the country.
Despite Coupang's pushback, a South Korean embassy spokesperson maintained that the country is committed to ensuring a fair and non-discriminatory business environment for all companies, regardless of their nationality.
However, a Competere Foundation model estimated a $525 billion loss in economic activity in U.S. states over the next decade if South Korea continues to implement policies that would be harmful to U.S. businesses operating in the country.
Proposed pending legislation in South Korea's assembly would broaden the power of the KFTC, which members of Congress are criticizing for unfairly treating American businesses.
Rep. Darrell Issa, R-Calif., sounded the alarm on South Korea's distancing from the U.S. during an interview, saying that the country's left-wing government is "closely aligned with China" and has begun attacking American companies.
Issa explained that Coupang is "owned by and founded by a Korean-American and they have been systematically attacked quite frankly, probably because they're an American company and effectively a unicorn in South Korea."
A group of over 50 GOP members of Congress signed a letter to the South Korean ambassador over what they deemed to be "discriminatory" business practices targeting American companies.
Shanker Singham, international trade and competition economist and CEO of the Competere Foundation, said that Korea is already an increasingly unfriendly place for U.S. companies to do business, and that looming regulations will make that environment even worse.
The Judiciary report said the decline of Coupang stock, which has tanked more than 45% since the breach and the South Korean government began retaliating, has negatively affected U.S. investors, including public pension funds and everyday Americans just trying to save for retirement.
