US investors drop Section 301 petition over Coupang probe

Two US investors in Coupang — Greenoaks and Altimeter — have withdrawn their petition urging the United States Trade Representative to investigate the South Korean government’s handling of the e-commerce platform following a massive data breach in November last year.

The investors filed the petition in January under Section 301 of the US Trade Act of 1974, a law used to address unfair trade practices by foreign governments.

“Over the last several weeks, we have had constructive discussions with the USTR that underscored the threat posed by the Korean Government’s actions against US technology firms like Coupang,” said Greenoaks in a press release.

“USTR has further announced that it expects to initiate broader Section 301 investigations into unfair trade practices affecting American companies, including discrimination against US technology companies and their digital goods and services.”

Coupang Inc., which holds 100 percent of Korea’s Coupang, was incorporated in Delaware and went public on the New York Stock Exchange in March 2021.

It noted that the Trump administration’s response has made clear that the US government intends to hold Korea accountable and that the USTR will take concrete action to help level the playing field for US technology firms, including in response to Korea’s treatment of Coupang.

“Those actions would provide a more comprehensive and powerful approach to address the concerns we raised than a company-specific investigation,” said Greenoaks. “In light of these efforts, pursuing a standalone petition focused on a single company would be redundant, and we have therefore withdrawn it.”

The US investors added that their potential action against the Korean government continues independently, even with the withdrawal of the petition to the USTR. They previously notified Seoul of their intent to pursue an investor-state dispute settlement, or ISDS, under the Korea-US free trade agreement.

Korea’s Ministry of Trade, Industry and Resources said Tuesday that despite the USTR’s announcement of a Section 301 investigation into alleged discriminatory treatment of American tech companies, it has not issued an official notice about which countries it will look into.

Korea formed a public-private joint investigative team to conduct a pan-governmental probe into Coupang’s data breach. Although both sides agreed that the personal information of 33.7 million user accounts was accessed by a former Coupang employee, Coupang has repeated that data from about 3,000 of the accounts was retained and later deleted by the perpetrator, while the joint investigative team has yet to announce the results of its probe.

Seoul has explained to Washington that the investigation into the Coupang data breach is being carried out under relevant laws and legal processes, saying that an individual incident should not be the subject of a Section 301 investigation.