Coupang faces probe over alleged manipulation of search algorithms

According to industry figures with research knowledge, South Korea’s Coupang is being investigated for allegations that it has manipulated search algorithms to prioritize its products over its suppliers’ products.

The Korea Fair Trade Commission conducted an on-the-spot inspection last month at the headquarters of an e-commerce group in Seoul after being accused of abusing market dominance by increasing exposure to its own branded products rather than third parties. went.

Despite the founder Bom Suk accelerating Coupang’s expansion plans, the study shows the latest retreat of SoftBank-backed companies. $ 3.5 billion initial public offering In March in New York.

Also, after a series of worker deaths in a warehouse, the company faced criticisms of labor practices and workplace safety, and consumers Handling of recent fires It killed one person and destroyed its largest logistics center.

Coupang has previously denied liability for death and has supported its fire protection procedures.

“KFTC is using that algorithm to investigate allegations of unfair business practices,” said a close industry insider.

Last year, KFTC paid 26.7 billion won ($ 23.6 million) to its neighbor, the country’s leading Internet portal, for tampering with search algorithms on video and shopping platforms to prioritize its own services over other services. I was fined.

Coupang has also been accused by a group of bullying vendors’ citizens of offering products at the cheapest prices on the platform, at the disadvantage of those who do not accept the request.

To protect small merchants, South Korean regulators are increasing surveillance of major online groups for unfair business practices and abuse of market power.

KFTC will soon announce the findings of a 2019 complaint by LG Household & Health Care, one of Coupang’s suppliers that the e-commerce group violates fair trade legislation.

Analysts said allegations of algorithm tampering are common in South Korea’s e-commerce sector.

Coupang’s own-brand products accounted for less than 10% of total sales, analysts said, but that percentage was expected to increase as the company sought to improve profitability.

“”[The allegations] It will definitely worsen the image of Coupang. ” “This is a consumer business. Companies need to take them seriously and do something to regain consumer confidence.”

Coupang refused to comment on the KFTC investigation and allegations made by civic groups.

With the listing of Coupang in the United States, Japan’s technology group Softbank Record profit last year.

However, Coupang, which reached a valuation of $ 118.3 billion shortly after the IPO, has since been under pressure from investors. Disappointing first quarter results Despite the surge in profits, losses expanded.

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Coupang faces probe over alleged manipulation of search algorithms Source link Coupang faces probe over alleged manipulation of search algorithms

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