[Sejong=E-Daily Reporter Kang Shin-woo ] As Coupang refuses to cooperate with the Fair Trade Commission’s on-site investigation into allegations of “abuse of power against suppliers” and takes legal action, the ruling party is pushing for a legislative amendment to exclude investigations conducted under laws under the Fair Trade Commission’s jurisdiction from the scope of the Framework Act on Administrative Investigations.

If the amendment passes the National Assembly, it is expected that “seven-day advance notice” requirements will no longer apply to cases involving violations of laws under the FTC’s jurisdiction—such as the Large-Scale Retail Business Act or the Franchise Act—thereby enabling unannounced on-site inspections.

According to government and National Assembly sources on the 26th, it has been confirmed that Lee Kang-il, a member of the Democratic Party of Korea on the National Assembly’s Political Affairs Committee, is pushing to draft an amendment to the Framework Act on Administrative Investigations that includes these provisions.

The core of the amendment is to expand the scope of exemptions under Article 3 of the Framework Act on Administrative Investigations, thereby excluding investigations into violations of laws under the FTC’s jurisdiction—such as the Large-Scale Retail Business Act, the Agency Business Act, and the Framework Act on Consumer Protection—which are currently excluded from the Act’s scope. The aim is to standardize investigation procedures, which have varied depending on the specific law under the FTC’s jurisdiction.

The current Framework Act on Administrative Investigations excludes investigations into violations of certain laws under the FTC’s jurisdiction—including the Fair Trade Act, the Labeling and Advertising Act, the Subcontracting Act, and the Franchise Business Act—from its scope. Conversely, the Large-Scale Retail Business Act, the Agency Business Act, and the Framework Act on Consumer Protection are not included in the list of excluded laws.

As a result, even for the same FTC investigation, on-site investigation procedures vary depending on which law is applied. When investigating alleged violations of the Fair Trade Act, the seven-day advance notice requirement under the Framework Act on Administrative Investigations does not apply; however, if an investigation is conducted based on the Large-Scale Retail Business Act, it falls under the scope of the Framework Act on Administrative Investigations.

The recent Coupang incident is a prime example. The Fair Trade Commission launched an unannounced on-site investigation on suspicion of a violation of the Large-Scale Retail Business Act to determine whether Coupang had unfairly shifted the costs of “price-customized coupons” onto its suppliers. However, Coupang refused to cooperate with the investigation, arguing that the Fair Trade Commission had failed to comply with the obligation to provide advance notice seven days prior to the start of the investigation as required by the Framework Act on Administrative Investigations, and filed a lawsuit with the court seeking to overturn the Fair Trade Commission’s decision to conduct an ex officio investigation, along with a motion for a stay of execution.

The Framework Act on Administrative Investigations stipulates that, in principle, the subject of an investigation must be notified in writing of the purpose and duration of the investigation at least seven days prior to the on-site inspection. However, as an exception, an investigation may proceed without prior notice if the commission determines that the purpose of the investigation would be difficult to achieve—for example, due to the destruction of evidence—if advance notice were given. The FTC maintains that the Coupang case falls under this exception.

The ruling party’s push for legislative reform stems from its assessment that it is necessary to prevent situations where the applicability of exceptions under current law is contested on a case-by-case basis and to standardize the FTC’s investigative procedures. There is also an underlying concern that if the court accepts Coupang’s argument, other companies could use the same logic to refuse on-site inspections or take legal action in future cases covered by the Framework Act on Administrative Investigations, such as those involving the Large-Scale Retail Business Act or the Agency Business Act.

Rep. Lee Kang-il stated, “Coupang’s management consists of lawyers, and they are exhibiting ‘legal loophole-exploiting behavior,’” adding, “We will amend the Framework Act on Administrative Investigations to exclude laws under the Fair Trade Commission’s jurisdiction—such as the Large-Scale Retail Business Act—from the scope of exceptions, thereby ensuring that investigations can proceed swiftly without concerns about the destruction of evidence.”