(EDITORIAL from Korea Times on May 17)

The Fair Trade Commission is facing fierce criticism for its decision to exempt Coupang Chairman Kim Beom-seok from being designated as the company's controlling party. This announcement, made on Wednesday, has ignited controversy due to perceived favoritism toward Kim and has cast doubt on the integrity of the FTC's regulatory practices. According to FTC regulations, individuals classified as "the same person," referring to those who effectively control a business group known as "chaebol," are subject to various obligations, including refraining from pursuing private interests and providing information about their relatives. By not being classified as such, Kim is able to avoid these obligations despite his substantial influence over the nation's largest e-commerce company. This marks the third consecutive year that Kim has evaded this classification since Coupang was designated as a conglomerate in 2021. The FTC's decision to exclude Kim, who is a U.S. citizen, has been due to a request from the Ministry of Foreign Affairs and the Ministry of Trade, Industry and Energy wary of possible trade conflicts with the United States. The FTC has cited Kim's U.S. nationality plus the fact that Coupang Inc., the parent firm of Coupang, is a U.S. entity. This year, on May 7, the FTC revised the Fair Trade Act regarding the criteria for determining the "same person," affecting both Koreans and foreign nationals. The revision now permits individuals to avoid being designated as "same person" unless their relatives invest in or participate in management as executives in affiliates. Thanks to this revision, Kim was able to sidestep the designation. Despite the FTC's decision, reports indicate that Kim's younger brother and his wife are employed at the Korean branch of Coupang, handling global logistics and personnel administration, respectively. Additionally, it's alleged that the younger brother holds shares in Coupang Inc., which could potentially influence decision-making on behalf of the chairman. The FTC should conduc t a thorough investigation to determine whether Kim's brother is actively involved in Coupang's management, even if he is currently refraining from participating in major decisions. The FTC must closely monitor the precise role of Kim's brother to ensure compliance with regulatory standards. Coupang has experienced rapid growth, ascending to become the nation's 27th largest conglomerate in terms of assets, up from 45th place last year. However, the company's swift expansion has been overshadowed by criticism of its unethical and anti-labor practices, particularly regarding workers' rights. Since 2020, there have been numerous reports of Coupang employees in logistics and delivery roles succumbing to overwork. In response, Coupang workers have staged protests demanding better working conditions. Additionally, the company has faced criticism for allegedly maintaining a blacklist to prevent individuals deemed "persona non-grata" from rejoining the company. By recognizing Kim's significant influence over Coupan g, the FTC's decision to exempt him from the "same person" designation appears to be blatant favoritism, enabling him to evade various obligations and potential penalties. This decision could be perceived as a form of reverse discrimination against domestic companies. The FTC must assert its authority to ensure that Kim fulfills the responsibilities expected of his position, striking a proper balance between his public and private roles. Calls to review the "same person" system are intensifying, with critics labeling it a "Galapagos regulation" unique to Korea. The Korea Chamber of Commerce and Industry (KCCI) and the Federation of Korean Industries (FKI), representing major conglomerates, argue that the system is outdated and does not align with modern business practices, such as environmental, social, and governance (ESG) management. The existing regulatory framework, originally designed to prevent improper successions of management control within chaebol families, may require significant reforms to stay p ertinent in today's evolving business landscape. In conclusion, the FTC must prioritize fairness and transparency, ensuring that all business leaders, irrespective of nationality, are subject to equitable standards. This entails reassessing outdated regulations and ensuring that individuals in control of substantial business entities fulfill their legal and ethical obligations. Source: Yonhap News Agency