Two major investors in Coupang on Thursday urged the Trump administration to investigate the South Korean government as Sen. Mike Lee (R-UT) accused South Korea of “unprecedented persecution.”
Greenoaks and Altimeter, two tech investors in the e-commerce company, said that they have filed arbitration claims against South Korea under the U.S.-Korea Free Trade Agreement, or KORUS, accusing the country of a witch hunt against Coupang after there was a major consumer data breach that led to billions of dollars in losses for investors.
“Trade agreements are only as strong as our willingness to stand up for them, and we are acting today to ensure that international competition is governed by rules, not the whims of politicians,” Neil Mehta, the Greenoaks founder and managing partner, said.
Greenoaks owns over $1.1 billion in Coupang stock, and argues that South Korea’s actions have cost it hundreds of millions of dollars. Altimeter has around $210 million in Coupang stock.
Coupang, which has become South Korea’s second-largest private employer after Samsung, experienced a personal data breach that affected roughly 33 million customers in South Korea, which led to an investigation and lawsuits from investors and consumers.
Coupang backers believe that the data breach was overstated and over-penalized for the sake of boosting domestic and Chinese competitors to the company.
The investors have called on the U.S. Trade Representative to investigate South Korea’s actions and impose “appropriate trade remedies, potentially including tariffs and other sanctions.” The company believes that the response to the breach has far exceeded normal regulatory enforcement.
South Korean Prime Minister Kim Min-seok said that law enforcement should go after the company with the “same determination used to wipe out mafias.”
South Korea’s Trade Minister Yeo Han-koo in January claimed that the South Korean government is not discriminating against Coupang and that American officials had “misunderstandings” after a trip to D.C. where he met with United States Trade Representative Jameison Greer and lawmakers.
“If a Korean company doing business in the U.S. caused such a large-scale information leak in the U.S., the U.S. would naturally do the same, and I clearly explained this and U.S. officials understood that,” he said.
Sen. Lee said that the South Korean actions against Coupang amount to “unprecedented persecution”:
Imagine if Congress & the Trump administration threatened to prosecute the CEOs of Samsung & LG — just because they’ve had success selling their products to U.S. consumers This is happening now to leaders of @CoupangInc, a U.S. tech company that exports billions of dollars in American products to South Korea. The Lee Jae-myung government’s unprecedented persecution of Coupang & its U.S.-citizen executives — including one of my constituents — is unacceptable. This madness must stop. Coupang should have free & fair access to the Korean market.
Joe Lonsdale, a founder of Palantir, said on X:
S Korea’s government is making a huge mistake following in China’s footsteps and illegally harassing a US company to favor Chinese tech giants. Really appreciate Neil and Greenoaks for standing up for American founders, even if it means suing a sovereign. Korea’s President Lee will need to decide whether hurting Korean workers, growth, and trade relations are worth sacrificing to advance CCP interests. Business with the USA must be free and fair. We don’t tolerate discrimination and bullying.
He added, “Korea doesn’t have the same freedom of speech protections as the US, so it will be hard to find the real story in the mainstream Korean media.”
Breitbart News reported in December that the spat over Coupang led to the USTR to abruptly cancel a scheduled trade meeting with South Korean officials. The same month, the House Judiciary Committee held a hearing focused on South Korea’s treatment of American companies, with Rep. Darrel Issa (R-CA) and other committee leaders warning that continued harassment of American businesses could have serious diplomatic and economic consequences.
