U.S. investors in Coupang have called for direct intervention from the American government, criticizing South Korea’s response to a massive data breach. If the U.S. government heeds this request, the Coupang incident could escalate into a trade dispute between the two nations.
These investors have openly expressed their intent to frame the data breach as a political issue undermining the U.S.-South Korea alliance. They’ve gone as far as labeling President Lee Jae Myung, his administration, and the Democratic Party as pro-China and anti-U.S.
On January 22, U.S. investors GreenOaks and Altimeter filed a petition alleging discrimination against Coupang by the South Korean government. They invoked Section 301 of the Trade Act (Super 301) to request tariffs on South Korean goods and market access restrictions.
Furthermore, they formally notified President Lee and Jeong Hong-sik, Director of the International Legal Affairs Bureau at the Ministry of Justice, of their intention to initiate international investment dispute (ISDS) arbitration against South Korea, citing the U.S.-South Korea Free Trade Agreement (FTA).
The investors warned that if South Korea doesn’t cease its alleged discriminatory measures, it could face billion-dollar lawsuits, potentially straining trade relations and overall bilateral ties between the two countries.
Unprecedented Attack on Coupang: Investors Claim It Favors Chinese Companies
In their press release, the investors stated that this action stems from the South Korean government’s unprecedented assault on the American company Coupang.
They further alleged that the South Korean government’s measures against Coupang appear aimed at undermining innovative American competitors to benefit domestic and Chinese firms in the South Korean market.
The investors also claimed that high-ranking Democratic Party officials have attempted to justify inciting public opinion against Coupang to eliminate it and benefit domestic and Chinese competitors.
They cited Prime Minister Kim Min-seok, currently visiting the U.S., as saying regulatory authorities should approach Coupang’s data breach with the determination of clearing out the mafia, presenting this as a notable threat to the company.
GreenOaks and Altimeter introduced themselves as long-term investors in U.S. e-commerce companies, including Coupang, which went public on the New York Stock Exchange in 2021.
They emphasized their role as American investors who have invested capital in U.S. tech companies for an extended period, rather than being a private equity firm acquiring companies. According to their statement, the value of Coupang shares held by American companies exceeds 15 billion KRW (10.4 million USD).
GreenOaks and its founder (partner), Neil Mehta, were major shareholders during Coupang’s 2021 initial public offering (IPO) on the New York Stock Exchange. Meta has served as the lead independent director on Coupang Inc.’s board.
The original petition and intention letter detail statements and actions from President Lee, the South Korean government, and the ruling party.
The petition reported that on December 11, 2025, President Lee argued for introducing a class action system in South Korea, stating that strong penalties must be imposed so that companies fear bankruptcy when they harm the public.
The investors claimed that the goal of the South Korean government’s current campaign is clear: to halt Coupang’s operations in South Korea.
However, critics argue that this interpretation exaggerates the government’s response to Coupang, which has been somewhat passive in addressing the data breach affecting 33.7 million personal records, seemingly avoiding accountability for Chairman Kim Beom-seok of Coupang Inc.
Coupang Investors Accuse President Lee of Pro-China and Anti-U.S. Sentiments, Allege Government Suppression of Coupang to Benefit Naver
Section 301 of the U.S. Trade Act allows for retaliatory measures such as tariffs if a foreign government’s actions are deemed unreasonable or discriminatory against U.S. commerce. Any stakeholder can petition for an investigation, and the U.S. Trade Representative (USTR) must decide whether to initiate an investigation within 45 days of receiving a petition.
If the USTR launches an investigation, the Coupang issue could escalate into a significant trade dispute between the two countries.
In their petition, the investors requested an official investigation, potential tariffs on South Korean goods, and restrictions on South Korean service industries’ access to the U.S. market. Even the initiation of such an investigation could have far-reaching consequences, prompting the South Korean government to engage in urgent diplomacy with U.S. officials.
Lee Han-goo, head of the Trade Negotiation Headquarters at the Ministry of Trade, Industry and Energy, has maintained that the Coupang incident is primarily a data breach issue, separate from trade matters. However, this stance may become untenable depending on the U.S. government’s decision.
The trade industry is closely monitoring the simultaneous invocation of Section 301 and ISDS. While ISDS is a post-factum compensation mechanism, Section 301 serves as an immediate trade pressure tool. If the U.S. administration actively supports Coupang and its investors, South Korea could face a precarious position.
There are growing concerns that the arbitration notice contains numerous contentious claims against the Lee administration, potentially straining U.S.-South Korea relations.
The investors have explicitly labeled President Lee, his administration, and the Democratic Party as pro-China and anti-U.S., expressing distorted perceptions.
In their notification, they described President Lee as a controversial figure, even among his supporters, due to fears that he might shift South Korea’s economic, political, and military direction away from the U.S. alliance and toward China’s aggressive regional hegemony.
They stated that President Lee’s actions since taking office have only intensified these concerns. He has made several hostile statements toward the U.S. and Coupang, aligning with the Democratic Party’s growing anti-U.S. and pro-China tendencies.
This appears to be an attempt to capture the attention of the U.S. administration, which views China as a significant challenge. While it’s unlikely that American officials will accept these claims at face value, it’s crucial for South Korea to address and correct these distorted representations of facts.
The investors further asserted that the actions against Coupang represent an unprecedented attack by the South Korean government on American companies to benefit Korean and Chinese competitors. They stated that such behavior is expected in authoritarian countries like Venezuela or Russia, not in a democratic nation and key ally like South Korea.
They specifically mentioned Naver and Kakao as domestic competitors of Coupang, alleging that the South Korean government is giving them preferential treatment.
The investors argued that the Fair Trade Commission imposed the largest fines on Coupang for issues related to its search algorithm while only fining Naver for similar allegations without pursuing criminal charges.
They pointed out high-ranking appointments of former Naver officials, including Han Seong-sook as Minister of Small and Medium Enterprises and Startups, Choi Hwi-young as Minister of Culture, Sports, and Tourism, and Ha Jung-woo as Chief AI Officer at the Blue House, suggesting significant ties to Coupang’s competitors.
Citing the case of KakaoPay, a Kakao subsidiary, they claimed that a customer data transfer incident to Alipay in Singapore was more severe than Coupang’s breach. They argued that the government’s minor fine of 15 million USD in that case demonstrates discriminatory treatment against Coupang.
The investors identified AliExpress as Coupang’s Chinese competitor, alleging that the South Korean government merely requested preventive measures for a 6 million USD data breach incident involving AliExpress last year.
They concluded that this evidence clearly shows that the South Korean government is applying different standards to Korean and Chinese competitors compared to American companies.
U.S. Threatens Compensation Based on KORUS FTA After Imposing Tariffs Despite the Agreement
Ironically, this ISDS intention letter cites the FTA, even though the U.S. Trump administration had previously imposed unilateral tariffs on South Korea and secured a 350 billion USD investment commitment, despite the existence of the KORUS FTA.
The investors stated that this notification is an official communication prior to initiating arbitration under the agreement. They warned that unless South Korea halts its alleged discriminatory measures and guarantees normal business operations without repeating similar actions, they will pursue arbitration seeking billions in damages.
The South Korean government has announced plans to activate its international investment dispute response system and review legal issues. If the U.S. government initiates an investigation, the situation could escalate to affect trade and diplomatic relations, making the South Korean government’s response strategy and messaging critical.
On January 21, during a New Year’s press conference at the Blue House, President Lee stated that whether it’s a global corporation or a domestic small business, it will handle matters in accordance with the law and principles.
