US Congress Accuses South Korea of Waging a "Government Assault" on American Retailer Coupang

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Committee Report Alleges Coordinated Campaign

The Republican-led House Judiciary Committee has released a 35-page interim staff report accusing the South Korean government of discriminating against Coupang, a Seattle-based e-commerce company that operates South Korea's biggest online marketplace. The report is titled "Closed for Competition: South Korea's Discriminatory Attacks on American-owned Businesses."

According to the committee, more than ten South Korean agencies opened dozens of investigations into Coupang after news broke of a data breach in 2025. Investigators reportedly issued over 4,000 document requests and conducted at least 652 interviews with company employees. The report describes this response as a "whole-of-government assault" on the company.

South Korea's foreign ministry rejected the findings. Spokesperson Park Il said the report reflected only Coupang's version of events, even though the government had been in contact with the committee for months. He called the discrimination allegations untrue.

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The Data Breach That Triggered the Storm

The controversy began when a former Coupang employee gained unauthorized access to customer data linked to as many as 33.7 million accounts. Coupang later said the individual had actually stored and retained information from roughly 3,000 accounts. Coupang's then-CEO, Park Dae-jun, resigned over the incident in December 2025 and was succeeded by Harold Rogers, an American citizen who previously served as the company's chief administrative officer.

Public anger in South Korea over the breach was intense, given how central Coupang has become to everyday shopping in the country. That public pressure, the report argues, fed into an escalating regulatory response that went far beyond the original incident.

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Disputed Recovery Operation in China

One of the report's most striking claims involves South Korea's National Intelligence Service (NIS). The committee says the NIS pressured Coupang into a risky recovery mission, sending a company employee to Shanghai to retrieve devices and sworn statements from the former employee behind the breach. As part of that effort, Coupang reportedly hired divers to pull a discarded laptop from a river. South Korean President Lee Jae-myung was briefed on the operation, according to the report.

The NIS has denied directing the investigation or recovery effort, saying it only requested materials from the company. Park Sun-won, a Democratic Party lawmaker who sits on the National Assembly's Intelligence Committee, said this week there had been "absolutely" no coercion involved.

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A Costly Fallout for Coupang and Its Investors

The regulatory pressure has had real financial consequences. Coupang was hit last month with a fine exceeding $410 million — the largest penalty ever imposed on a single company in South Korea, according to the committee, and one it says exceeds fines given to Korean firms for more serious data breaches. The report also links the sustained scrutiny to a more than 40 percent drop in Coupang's market capitalization, a decline it says has hurt U.S. pension funds and individual investors.

Some major shareholders have already taken formal action. Investment firms Greenoaks Capital Partners and Altimeter Capital petitioned the U.S. Trade Representative to open a Section 301 investigation into Seoul's conduct, while several other U.S.-based investors have filed notices to join an investor-state dispute settlement process under the U.S.-South Korea trade framework.

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Trade Deal at the Center of the Dispute

The committee argues that South Korea's treatment of Coupang breaches a trade agreement negotiated last year under the Trump administration. That deal, outlined in a joint fact sheet from November, commits both governments to ensuring U.S. companies face no discrimination or unnecessary barriers in digital services and online platform regulation.

The report explicitly invokes the Trump administration's stance that it "will not tolerate foreign efforts to engage in regulatory practices that are more burdensome and restrictive on United States companies than their own domestic companies." Committee members have also pointed to South Korea's broader economic posture, suggesting that regulatory pressure on Coupang has, whether intentionally or not, tended to benefit both domestic Korean rivals and Chinese competitors in the market — a dynamic that has drawn added scrutiny given wider U.S. concerns about Beijing's economic influence in the region.

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What Comes Next

Coupang, for its part, said in a statement that it regrets the circumstances that led to the investigation and remains committed to "finding a constructive resolution" so the company can continue serving as a bridge between the U.S. and South Korea on trade and investment.

The House Judiciary Committee has signaled the inquiry is not over, saying it will continue oversight of "these foreign anti-competitive regimes to inform potential legislative reforms to protect American businesses and consumers." With ongoing investor-state arbitration claims, a pending USTR petition, and continued congressional pressure, the dispute over Coupang looks set to remain a flashpoint in U.S.–South Korea trade relations in the months ahead.

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Sources

1. Reuters – "US House committee says South Korea discriminated against Coupang": https://www.reuters.com/world/asia-pacific/us-house-committee-says-south-korea-discriminated-against-coupang-2026-07-02/
2. House Judiciary Committee (official government report/press materials): https://judiciary.house.gov/media/press-releases/chairmen-jordan-and-fitzgerald-demand-information-about-south-koreas
3. The Korea Herald – "Korea has long targeted US firms like Coupang: US House report": https://www.koreaherald.com/article/10796143
4. CNBC – "South Korean government discriminated against Coupang, U.S. companies, House report finds": https://www.cnbc.com/2026/07/01/coupang-south-korea-coupang-house-judiciary.html

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