The personal data breach of Coupang members in South Korea is set to escalate into an international dispute.
On Thursday, shareholders of Coupang’s U.S. entity announced their intention to initiate international investment dispute (ISDS) arbitration against the South Korean government regarding the data breach incident.
The Ministry of Justice reported that U.S. shareholders of Coupang, including GreenOaks and Altimeter (hereinafter referred to as the claimants), submitted a notice of intent for ISDS arbitration to the South Korean government, citing the Korea-U.S. Free Trade Agreement (FTA).
A notice of intent is a document in which claimants express their intention to pursue arbitration. While not a formal arbitration filing, it allows claimants to officially initiate arbitration 90 days after submission.
The notice alleges that following Coupang’s data breach on December 1, 2025, the National Assembly and executive branch targeted the company with various administrative actions and threatening statements.
The claimants argue that these actions violated several FTA provisions, including Article 11.5(1) on fair and equitable treatment, Articles 11.3 and 11.4 on national treatment and most-favored-nation treatment, Article 11.5(2) on comprehensive protection, and Article 11.6 prohibiting expropriation.
They also claim tens of billions of dollars in damages resulting from these actions.
The claimants have also petitioned the U.S. government, alleging discriminatory treatment of Coupang by South Korean authorities and requesting an investigation and appropriate measures.
Reuters reports that GreenOaks and Altimeter have urged the U.S. Trade Representative (USTR) to investigate South Korea’s actions and impose suitable trade remedies, potentially including tariffs and other sanctions.
They assert that the South Korean government sought to undermine Coupang’s operations through a coordinated response involving labor, financial, and customs investigations, which they claim were largely unrelated to the data breach.
The claimants are demanding that South Korea cease these alleged discriminatory practices and restore a fair and predictable business environment for U.S. companies operating in the country.
Last November, Coupang disclosed a data breach affecting approximately 33 million customer records, triggering strong backlash from South Korean political circles and public opinion. The government launched an investigation, while investors and consumers filed lawsuits against the company.
During a New Year’s press conference at the Blue House on Wednesday, President Lee Jae Myung stated that the government would respond rationally, in accordance with laws and principles, whether dealing with global corporations or small domestic businesses.
The Ministry of Justice has committed to establishing a joint response system led by the ‘International Investment Dispute Response Team’ to thoroughly examine the legal issues related to the notice of intent. They pledged to actively address the situation by disclosing relevant information to uphold the public’s right to know and enhance procedural transparency.