Coupang Undermines Korea’s Regulatory Sovereignty by Leveraging U.S. Politics; U.S. Lawmakers Warn “Witch Hunt Is Shocking, There Will Be Consequences”

U.S. lawmakers raise concerns over discriminatory Korean digital regulations
Congress steps up pressure under the banner of protecting U.S. companies
“Washington is misunderstanding the issue,” Seoul says, but even vice-minister-level outreach fails to soften stance

Claims have surfaced in the U.S. Congress that the South Korean government is unfairly discriminating against American technology companies, including Coupang, and hampering their business operations through various digital regulations. The Korean government views these accusations as stemming from misunderstandings and has dispatched Vice Minister-level trade negotiator Yeo Han-koo to Washington, D.C. to explain its position to the U.S. administration and lawmakers. However, the effort has made little headway. With Washington showing no sign of revising its perception, digital regulation is likely to remain a persistent point of contention between the two countries.

“Unacceptable Treatment of Coupang,” U.S. Hardliners Issue Public Warning

On the 13th (local time), Adrian Smith, chairman of the House Ways and Means Subcommittee on Trade (Republican, Nebraska), said at a subcommittee hearing, “From what I have observed, Korea continues to pursue legislative efforts that clearly target U.S. companies.” Smith argued that such actions run counter to the Korea–U.S. trade agreement.

South Korea and the United States agreed in a joint fact sheet released last November following a bilateral summit that they would “ensure that U.S. companies are not discriminated against or face unnecessary barriers in digital service-related laws and policies, including network usage fees and online platform regulations, and facilitate cross-border data flows, including with respect to location data, reinsurance, and personal information.”

Smith added that “Korean regulators already appear to be aggressively targeting U.S. technology leaders,” citing what he described as discriminatory regulatory measures against Coupang. He characterized moves by the Korean government and National Assembly to hold Coupang accountable for a large-scale personal data breach as an example of such discrimination.

Representative Carol Miller (Republican, West Virginia) also claimed that “the Korean National Assembly continues to advance legislation targeting U.S. companies, including a recently passed censorship bill, and has launched a political witch hunt against two American executives.” The “censorship bill” she referred to is widely interpreted as the recently passed amendment to Korea’s Information and Communications Network Act—known domestically as the Disinformation Prevention Act—while the “two American executives” are understood to be Harold Rogers, interim head of Coupang Korea, and Kim Beom-seok, chairman of Coupang Inc. Although most of Coupang’s revenue is generated in Korea, Coupang Inc. is a U.S. company incorporated in Delaware that holds 100% of Coupang Korea’s shares, with more than 70% of the parent company’s voting rights controlled by founder and U.S. citizen Kim.

Concerns over Korea’s digital regulatory trends and the investigation into Coupang were also raised by Democrats. Representative Suzan DelBene (Democrat, Washington) referenced trade agreements with Korea, saying, “I am hearing from companies like Coupang in my district that Korean regulators are already violating their commitments.” She added, “Trade agreements concluded under the Trump administration lack enforcement tools,” and stressed the need for “a Congress-led effort to establish digital trade rules that protect privacy, support innovation, and safeguard our companies operating overseas.”

Vice-Minister-Level Outreach Amid Sensitivity to U.S. Political Signals

The hearing, which focused on digital regulations in other countries that negatively affect U.S. companies, took place while Vice Minister Yeo was visiting the United States to address concerns among the U.S. government and political circles over Korea’s digital regulatory direction. While such issues have been raised before, they have gained greater prominence following the passage of the amended Information and Communications Network Act and the personal data breach involving Coupang.

Previously, the U.S. State Department criticized the amendment, arguing that it would negatively affect U.S. platform companies and amount to censorship that undermines freedom of expression. Although the U.S. administration has yet to issue an official position on Coupang, it is widely believed that Washington could step in to support the company, given Coupang’s ongoing lobbying efforts targeting both the executive branch and Congress.

The Korean government has sought to ease U.S. concerns by explaining that regulations such as the Online Platform Act and the amended Network Act do not discriminate against any specific country. However, U.S. officials maintain the view that American companies are being singled out. While U.S. firms’ market dominance means they are more directly affected by regulation, Washington argues that its companies are being politically targeted. Korea’s actions toward Coupang are framed domestically as a response to a data breach, yet Coupang has appealed to U.S. authorities, claiming it is being treated unfairly.

The possibility of severe sanctions by Korean regulators also appears to have further alarmed U.S. lawmakers. On the 12th, Fair Trade Commission Chairman Joo Byung-ki said in a YouTube interview that a business suspension for Coupang over the data breach was “under review.” He reiterated at a National Assembly committee hearing last month that a joint public-private investigation was underway and that penalties, including a potential suspension of operations, could be imposed depending on the findings.

Will Korea’s Regulatory Edge Be Blunted?

As the Coupang issue shows signs of escalating into a diplomatic dispute between Seoul and Washington, the Korean government has grown more cautious. The Presidential Office’s decision last month to convene a closed-door meeting involving foreign policy, security, and intelligence officials is seen as an effort to avoid provoking U.S. political circles. The government reportedly also discussed allegations that Coupang had lobbied U.S. political figures.

According to lobbying disclosure reports released by the U.S. Senate, Coupang has spent $10.75 million lobbying the U.S. administration and Congress since its Nasdaq listing in 2021. Its lobbying targets have included the White House, both chambers of Congress, the Departments of Commerce, State, Agriculture, and Treasury, the Office of the U.S. Trade Representative, and the National Security Council. Alex Wong, now global chief strategy officer at Hanwha Group, handled Coupang’s Washington outreach from 2021 until just before the launch of the Trump administration’s second term. Wong previously served as U.S. deputy special representative for North Korea and deputy assistant secretary of state for East Asian and Pacific affairs during Trump’s first term, and later as deputy national security advisor.

As Coupang intensifies its counteroffensive backed by U.S. political support, there is growing room for a shift in the Korean government’s response. One trade expert argued, “From Seoul’s perspective, it will be important to manage the situation so that even President Trump does not come to see Coupang simply as an American company,” stressing that Korea should not cede leadership in resolving the issue to Chairman Kim.

Some critics contend that the episode has clearly demonstrated how mobilizing the U.S. Congress can effectively neutralize Korea’s regulatory authority and political pressure. Another trade expert said, “This case goes beyond a single company’s crisis response and represents a turning point in the strategic landscape of regulatory avoidance and political risk management,” adding that “restructuring corporate domicile and governance around the U.S., as Coupang has done, may increasingly be viewed as a more rational option than expanding domestic lobbying or political outreach.”