Coupang Investors Claim “Discriminatory Probe” by Korean Government, Raising Risk of Trade Dispute

Call on U.S. government to intervene through trade channels
Coupang distances itself, calls it “unrelated,” as accountability debate persists
Signs of shifting response pathways for global companies and investors

U.S.-based investment firms have invoked international dispute-settlement mechanisms over a data breach at Coupang and the Korean government’s response, escalating what began as a domestic regulatory issue into one touching on U.S.–Korea trade relations and the prospect of international arbitration. By reframing the government’s investigation as “discriminatory treatment and a violation of investor rights,” the firms have pushed the issue into a new phase in which trade remedies and treaty-based claims are openly discussed. Coupang has said the moves reflect the independent judgment of its investors, but civic groups and broader public opinion continue to widen the debate to encompass corporate responsibility, investor influence, and the overall approach of government regulation.

“Excessive scope and intensity of enforcement”

GreenOaks and Altimeter, U.S. investment firms, said in a statement on the 22nd (local time) that they had asked the Office of the United States Trade Representative (USTR) to investigate the Korean government’s actions related to Coupang and to pursue appropriate trade remedies, including tariffs and other measures. The firms said that audits launched by Korean authorities following a data breach at Coupang in November last year—including probes into alleged tax evasion and the status of information leaks—amounted to “discriminatory treatment,” and added that they had already filed a notice seeking to initiate arbitration against the Korean government under the investor–state dispute settlement (ISDS) provisions of the Korea–U.S. Free Trade Agreement (FTA).

As a result, the core question has narrowed to whether the manner and scope of the government’s investigations constitute discriminatory treatment. In their statement, the firms argued that audits into alleged tax evasion and data leaks surrounding Coupang were excessive compared with those applied to companies in the same industry, linking the claim to a potential violation of the FTA’s “fair and equitable treatment” (FET) standard. By describing the measures as an attempt to “target and neutralize an innovative American competitor,” they sought to recast the issue as a series of actions restricting market access, a move widely seen as an effort to elevate a domestic regulatory dispute into the realm of trade rules.

The reference to ISDS follows the same logic. ISDS allows investors to bring disputes with states to international arbitration and seek damages for treaty violations. Procedurally, the process begins with a 90-day consultation period, during which the parties attempt to reach a settlement; failing that, the case proceeds to the formation of an arbitration panel. In practice, diplomatic and trade-channel coordination between governments often runs in parallel before the process reaches that stage. Against this backdrop, the latest move is viewed as a strategy that keeps open both pressure from the U.S. administration and the possibility of judicial dispute.

Figures and examples cited in the statement were used to substantiate the claims. The firms noted that Korean authorities characterized the breach as involving “tens of millions of victims,” while, they said, Coupang’s own internal findings indicating a leak affecting roughly 3,000 people were disregarded. They also listed specific actions—including “repeated raids,” “blocking commercial contracts unrelated to the data breach,” and “pressure on the National Pension Service to sell its stake”—to underscore their argument that the scope of administrative enforcement extended beyond information protection issues.

The scale of resources deployed also drew attention. The investors said 150 officials from the National Tax Service and 86 police officers were assigned to the Coupang investigation, describing it as an “overwhelming mobilization” involving hundreds of public officials. The language appears aimed at questioning the proportionality of enforcement. Such assertions could factor into the USTR’s assessment of whether to open an investigation into whether Korea’s actions were excessive or discriminatory. After receiving a petition, the USTR has up to 45 days to decide whether to launch an inquiry, and, if it proceeds, will determine potential remedies following public comment and hearings.

Difficult to separate corporate and investor interests

Coupang said it is “cooperating in good faith with the Korean government’s investigation in accordance with relevant laws and procedures,” while emphasizing that the U.S. investors’ submission of an ISDS notice “is unrelated to the company’s position.” The company is seeking to draw a clear line between investor actions and corporate decision-making, presenting the matter as a legitimate exercise of investor rights rather than an effort by the company to provoke an international dispute. By simultaneously affirming cooperation with regulators, Coupang also appears intent on minimizing the image of a direct confrontation with domestic authorities.

Market participants, however, have been reluctant to accept this distancing at face value, noting the deep involvement of GreenOaks and Altimeter throughout Coupang’s growth. GreenOaks, in particular, invested heavily in the company well before its U.S. listing. At the time of Coupang’s initial public offering in 2021, disclosures showed GreenOaks and its chief executive, Neil Mehta, together holding a 16.6% stake, forming the second-largest shareholder group after the SoftBank Vision Fund. While the stake has since declined, GreenOaks still held about 3.2% as of March last year, valued at approximately $1.4 billion based on the share price at the time.

The perception is reinforced by the fact that Mehta has served on Coupang’s board of directors, a position that entails access to information across the company’s operations and participation in strategic deliberations. Against this backdrop, many in the market view the timing and intensity of the investors’ challenge—and their direct appeal to U.S. government agencies—as unlikely to be coincidental. Although framed as a defense of investor rights, the move is widely seen as likely to disrupt the broader regulatory environment surrounding Coupang, making it difficult to argue that corporate and investor interests are neatly separable.

Criticism from civic groups and political circles converges on the same point. The People’s Solidarity for Participatory Democracy issued a statement titled “U.S. political and business circles must stop undermining sovereignty by defending illegal Coupang,” arguing that the company cannot be entirely insulated from the consequences of this trajectory. By effectively transforming domestic regulation and law enforcement into an international trade issue, the episode makes it hard to fully absolve the company of responsibility. In a global platform economy marked by complex investment and governance structures, the extent to which Coupang’s claim of “investor-only action” can remain persuasive has emerged as another focal issue.

Implications for global platform strategies

The episode has also prompted a reassessment of how the Korean government and the National Assembly regulate companies. In Korea, parliamentary hearings, intense public pressure, and the parallel use of administrative and judicial processes have long been familiar enforcement tools. From a global perspective, however, such approaches can be interpreted as political pressure or emotionally driven responses. Coupang’s U.S. investors focused less on the outcome of legal application than on the enforcement process and its political context, a framing that fed directly into trade-dispute logic. The case illustrates how identical laws applied to domestic and foreign firms can generate vastly different repercussions depending on enforcement methods and communication strategies.

Accordingly, shifts in the strategies of other companies and investors are anticipated. In this case, investors bypassed Korean courts and administrative appeals, instead raising the issue with the U.S. administration and Congress. For companies with overseas subsidiaries and global governance structures, the episode underscores the ability to expand disputes into the domain of international trade rules. Establishing foreign entities, listing on U.S. exchanges, and cultivating global investor networks can collectively function as a form of “crisis-response infrastructure.” Similar situations in the future may prompt companies to consider strategies that simultaneously leverage domestic responses and engagement with foreign governments and international norms.

Ultimately, the most significant impact of the Coupang dispute may be its precedential effect. As it becomes clear that the actions of a single company and its investors can influence institutions and policies more broadly, conflicts between companies and governments are increasingly seen as repeatable patterns. This suggests that unless the Korean government develops regulatory enforcement standards and explanatory frameworks tailored to global enterprises, it will continue to face the risk of trade-related backlash. In that sense, the Coupang case is likely to be remembered not as a simple contest of winners and losers, but as a moment signaling that the rules of the game—for both policy and corporate strategy—have changed.