Seoul: South Korea's fair trade watchdog has imposed a 500 million-won (US$327,000) fine on the South Korean arm of Coupang for misleading advertisements about discounts offered to paid membership subscribers. The Fair Trade Commission (FTC) announced that this penalty, the legal maximum, is in response to Coupang Corp.'s misleading advertisements on its website from August 2020 to May 2022.

According to Yonhap News Agency, the FTC highlighted that the misleading advertisements suggested that Coupang Wow program members could purchase products at lower prices than regular customers. However, the discounts were offered through a one-time coupon, which was not clearly communicated to the users. The FTC's release stated, "Coupang released advertisements as if Coupang Wow members had a separate pricing system offering permanent discounts compared with regular prices," but in reality, these discounts were only available once through a subscription coupon.

The FTC also pointed out that Coupang displayed exaggerated information about discounts during the membership cancellation process. Phrases such as "You will no longer be able to purchase products at Wow membership prices" were used, contributing to what the FTC described as "deceptive advertising" under the Act on Fair Labeling and Advertising.

The FTC noted that Coupang's misleading advertisements led to a significant rise in its membership and persisted for nearly two years. Currently, discussions are underway at the National Assembly to raise fines for misleading advertisements to 5 billion won from the current 500 million won. This move is in response to increasing consumer damage from misleading advertisements, especially with the rise of artificial intelligence technology, while existing fines have been criticized for their lack of effectiveness.