- Specifying promotional cost-sharing ratios and minimum order quantities in contracts, and preparing a 3 billion KRW win-win plan including support for product development and online advertising. -
June 23, 2026
Subcontracting Investigation Division
The Korea Fair Trade Commission (KFTC) has finally confirmed (May 22, 2026, sub-committee) the consent decree regarding the alleged violations of the Fair Transactions in Subcontracting Act (hereinafter the "Subcontracting Act") by Coupang Corp. and CPLB Corp.
Note: CPLB Corp. is a newly established company resulting from a physical spin-off from Coupang Corp. on July 1, 2020, and succeeded Coupang Corp.'s PB product manufacturing entrustment and sales business. Coupang Corp. holds a 100% equity stake in CPLB Corp.
This final consent decree is the first confirmed case related to the unfair determination of subcontracting payments since the consent decree system was introduced to the Subcontracting Act in July 2022.
<Background of the Consent Decree>
Starting in October 2022, the KFTC had been investigating whether the applicants violated the Subcontracting Act while entrusting the manufacturing of PB (Private Brand) products. The investigation focused on two main allegations:
Failing to issue written documents containing statutory items or issuing documents lacking signatures and seals to 314 subcontractors.
Reducing supply unit prices while conducting PB product promotional events not stipulated in agreements with 94 subcontractors.
The applicants applied for the initiation of a consent decree process (March 24, 2025) by preparing corrective measures to improve the subcontracting transaction order and provide damage relief. The KFTC sub-committee decided to initiate the procedure (August 27, 2025).
Following consultations with the applicants, a provisional consent decree was drafted, and an initial round of opinion gathering was conducted targeting related organizations (such as the Ministry of SMEs and Startups) and stakeholders (Oct. 2 – Nov. 19, 2025). Due to a low response rate from subcontractors, an additional round of opinion gathering was conducted (Jan. 9 – Feb. 24, 2026).
Participating subcontractors expressed positive feedback on the corrective measures, such as support for PB product development and online advertising costs, as well as the signing of ancillary agreements specifying promotional cost-sharing ratios, minimum order quantities, and lead times. Accordingly, the final consent decree was prepared.
<Final Consent Decree>
1. Corrective Measures to Improve Transaction Order
- (Systemizing the Purchase Order Signature Process): The applicants will improve the Supplier Hub system so that subcontractors can access it to verify order details and ensure signatures and seals are appropriately applied to the purchase orders.
- (Signing Product-Specific Ancillary Agreements): Before launching a PB product, the applicants will sign a product-specific ancillary agreement that formalizes the 'Minimum Order Quantity (MOQ)' and 'Lead Time' determined through consultation with the subcontractor.
Formalizing the Minimum Order Quantity—the minimum volume required for the subcontractor to secure a return on investment (e.g., production facility installation, product development) and a reasonable profit—resolves uncertainties during the delivery process.
Formalizing the Lead Time—the period from the purchase order request to product production, warehousing, and the start of sales—reduces the burden on the subcontractor to stockpile inventory in advance.
- (Signing Promotional Event Ancillary Agreements): When conducting promotional events, the applicants will sign a 'Sales Promotion Event Ancillary Agreement' that predetermines the promotional cost-sharing ratio in consultation with the subcontractor. The agreement will clearly specify that the subcontractor bears up to a maximum of 50% of the promotional costs, while the applicants will bear the remaining costs.
2. Win-Win Plan to Promote Subcontractors' Rights and Interests (Total 3 Billion KRW)
- (Product Development and Delivery Cost Support): The applicants will provide 1.05 billion KRW to support costs incurred during product development, production, and delivery for subcontractors. Accordingly, 10 million KRW will be paid to each of the 94 subcontractors affected by the unfair subcontracting payment determination, and the remaining balance will be distributed to subcontractors affected by the violation of the written issuance obligation.
- (Online Advertising and Promotional Event Support): The applicants will provide 1 billion KRW for advertising costs required to promote subcontractors' PB products on the applicants' websites and mobile apps.
- (Offline PR Support): The applicants will provide 450 million KRW to support offline PR costs, such as participation and exhibitions in on-site expos (e.g., Digital Retail & Logistics Expo) for subcontractors' PB products.
- (Enhanced Win-Win Support for Excellent Subcontractors): The applicants will select 'excellent subcontractors' based on their transaction history and provide 100 million KRW for prize money and promotional events.
- (Capacity Building and Market Expansion Support): The applicants will provide 400 million KRW to support subcontractors with consulting services related to PB product development and costs for expanding into overseas markets. Furthermore, the applicants will provide subcontractors with sales analytics, product development know-how, and consumer preference trends to utilize in PB product development, alongside educational support in areas such as tax, labor, and legal affairs.
- (Regular Council Operation): The applicants will form a regular council with subcontractors to gather opinions and prepare measures for win-win cooperation, such as quality improvement and safety assurance.
<Confirmation of the Final Consent Decree>
The KFTC judged that the corrective measures proposed by the applicants are appropriate for protecting subcontractors' rights and improving the subcontracting transaction order, taking into consideration:
The improvement of transaction order and prevention of recurrence.
Relief of subcontractor damages and welfare enhancement.
The balance with the expected level of sanctions.
Furthermore, regarding the promotional events, the KFTC decided to cite the final consent decree, determining that it is difficult to classify the actions as a grave and clear violation of the law based on the following:
The mere act of the applicants proposing a promotional event without materials such as price discount plans or event results (profit/loss changes) is difficult to definitively conclude as an unfair determination of subcontracting payments.
There were instances where subcontractors themselves proposed promotional events to clear inventory or increase sales.
The proportion of subcontractors who experienced a unit price reduction (94 companies) out of the total subcontractors (504 companies) was relatively low (18.6%).
<Significance and Expected Effects>
Specifying promotional cost-sharing ratios, minimum order quantities, and lead times in contracts are corrective measures that are highly difficult to achieve solely through standard sanctions (such as orders to prevent recurrence). As the first such case in PB product subcontracting transactions, this is expected to alleviate the burden on subcontractors and significantly contribute to improving the subcontracting transaction order.
The financial support provided for product development (1.05 billion KRW) to subcontractors who experienced a unit price reduction exceeds the total unit price reduction amount in this case (700 million KRW). Moreover, the total scale of the win-win plan (3 billion KRW) is approximately 3 to 5 times the expected penalty (estimated between 600 million and 1.1 billion KRW). This is anticipated to have a highly positive effect on increasing subcontractors' sales and opening new market channels.
Moving forward, the KFTC, alongside the Korea Fair Trade Mediation Agency, plans to conduct quarterly inspections to ensure the applicants are faithfully implementing the consent decree and will continuously monitor for any unfair subcontracting transaction practices within the online shopping sector.