(C) KED Global
NEW YORK – Coupang Inc., the dominant leader in South Korea’s e-commerce market, is facing intense legal pressure in the United States following a massive data breach. A shareholder class-action lawsuit has been filed in a U.S. federal court, alleging that the company violated securities laws by failing to disclose the incident in a timely and transparent manner.
Allegations of Disclosure Violations
According to the U.S. District Court for the Northern District of California, shareholder Joseph Berry filed a lawsuit on December 18 against Coupang Inc., Founder and CEO Bom Kim, and CFO Gaurav Anand. The plaintiff alleges that the defendants issued "false or misleading statements" regarding the company's cybersecurity health and failed to report the breach to the Securities and Exchange Commission (SEC) within the required timeframe.
The lawsuit, led by the Rosen Law Firm, contends that an unauthorized former employee accessed sensitive customer data for approximately six months without detection. Although Coupang reportedly became aware of the breach on November 18, it did not formally disclose the matter to U.S. regulators until December 16—surpassing the four-business-day reporting mandate.
Market Impact and Investor Losses
The legal action follows a sharp decline in Coupang’s stock price. On November 28, shortly before the breach became public knowledge, shares traded at $28.16. By December 19, the price had tumbled to $23.20, representing an 18% loss in market value. Legal experts anticipate that the number of plaintiffs will grow as more institutional and individual investors join the litigation to seek damages for the resulting financial hit.
Extensive Lobbying Efforts Revealed
Amidst the escalating legal crisis, Senate records reveal that Coupang has significantly increased its lobbying footprint in Washington D.C. Over the past five years, the company has spent approximately $10.75 million (15.9 billion KRW) on lobbying efforts.
The scope of these activities extends beyond Congress to the Department of Commerce, the State Department, and the White House. Recent reports indicate that Coupang has been promoting its role in job creation and strengthening economic ties between the U.S. and its Asian allies, including South Korea, Taiwan, and Japan.
Heightened Regulatory Scrutiny
In South Korea, Coupang is currently under investigation by the Personal Information Protection Commission and law enforcement agencies. While some observers speculated that the recent postponement of the KORUS FTA Joint Committee meeting was a "warning" from the U.S. regarding the pressure on Coupang, officials familiar with the matter have denied any direct link between the two events.
As the company grapples with both regulatory sanctions in Seoul and a high-stakes class-action suit in the U.S., industry analysts suggest that Coupang’s governance and cybersecurity protocols will remain under intense scrutiny for the foreseeable future.
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