The Korea Fair Trade Commission (KFTC) announced on August 27, 2025, that it has decided to initiate a consent order procedure for Coupang Inc. and CPLB Inc. in connection with suspected violations of the Subcontracting Act. CPLB Inc. was established on July 1, 2020, through a physical division from Coupang, succeeding to the subcontracted manufacturing and sales of private brand (PB) products, and Coupang holds 100 percent of its shares.
The consent order system allows a company under investigation for possible violations to voluntarily propose corrective measures—such as compensating affected parties or improving business practices—rather than undergoing lengthy legal proceedings. If the KFTC, after hearing opinions from stakeholders, finds the proposed remedies appropriate, it defers judgment on whether a violation occurred and focuses on the swift implementation of those measures. The process involves a decision to initiate proceedings, preparation of a tentative consent order, collection of opinions from interested parties, and final deliberation and approval by the Commission.
The KFTC has been investigating whether Coupang and CPLB violated the Subcontracting Act by issuing unsigned or unsealed order documents for PB products and by unilaterally reducing the supply prices of PB products for 94 subcontractors through promotional activities that were not contractually agreed upon. PB, or private brand, products are those planned and sold by large distributors such as online retailers, supermarkets, and convenience stores under their own brands.
Instead of contesting the KFTC’s findings, Coupang and CPLB applied for the consent order procedure in March 2025 to improve subcontracting practices and provide prompt relief to subcontractors. They proposed corrective measures that include ensuring all contracts and order forms are duly signed or sealed, specifying the minimum order quantity (MOQ) and lead time for each PB product in written agreements, and conducting prior consultations on promotional events while clearly stipulating the cost-sharing ratio, with Coupang bearing at least 50 percent of promotional costs. The MOQ provision is intended to guarantee subcontractors a sufficient quantity of orders to recover initial investments—such as production line adjustments and product development costs—and to secure reasonable profits. Refusal or delay in accepting or receiving the agreed quantity would constitute an unfair cancellation of orders under Article 8(1)-2 of the Subcontracting Act. Lead time refers to the period from order placement to production, delivery, and commencement of sales, and setting an excessively short lead time may impose unnecessary inventory burdens on subcontractors.
As part of their commitment to mutual growth, Coupang and CPLB also proposed a support package worth at least 30 billion won, including financial assistance for PB product development and supply, support for discount coupons and online advertising, aid for participation in trade fairs and exhibitions, incentives for outstanding subcontractors, and consulting services for PB product development and market expansion. They also plan to establish a regular consultative body to gather opinions and address grievances from subcontractors.
The KFTC decided to initiate the consent order procedure after comprehensively considering the expected effectiveness of the corrective measures in improving subcontracting practices and protecting subcontractors, as well as the proportionality between the implementation costs and the potential sanctions. The Commission will work with Coupang and CPLB to refine the details of the corrective measures, prepare a tentative consent order, collect feedback from stakeholders and related institutions, and then deliberate on and decide whether to approve the final consent order.