Coupang Fined 500 Million Won for Deceptive 'Member-Only Discount' Ads

[Anchor]

Coupang has been fined 500 million won for deceptive advertising. The company marketed its service as if paid members could always purchase items at a discount, but in reality, the discount was only applied once.

Report by Chae Hee-sun.

[Reporter]

This is a beauty product sold on Coupang in August 2020.

Although the original price is over 20,000 won, it was displayed as if 'Wow' members, the company's paid subscription service, could purchase it for 3,000 won less.

The phrase 'Member-Only Special Price' was also used to make it appear as if there were ongoing benefits for paid members.

Coupang ran these advertisements from August 2020 to May 2022, and the Korea Fair Trade Commission (KFTC) has ruled this as 'consumer deception.'

While a 'Wow Member Price' discount was indeed offered to paid members in early 2020 when competition in the online shopping market was fierce, such discounts were discontinued starting in August 2020.

Instead, the company provided a discount coupon immediately after signing up, which could only be used once. Despite this, Coupang advertised as if the 'Wow Member Price' was always cheaper without providing any clear notice, thereby inducing users to sign up for the paid membership and hindering consumers' rational purchasing decisions.

[Coupang Paid Membership Member: I just thought that buying it as a 'Wow' member would be cheaper, but I'm not exactly sure. It seems a bit confusing.]

During the 1 year and 8 months that Coupang ran these advertisements, the number of paid members increased by more than 4.5 million.

[Lee Young-hee / KFTC Labeling and Advertising Team Director: This is the first case of sanctioning price discount advertisements linked to a paid membership service. It confirms that the conditions and scope of discount applications for paid membership services must be clearly displayed so that consumers can recognize them.]

The KFTC stated that the illegality was significant given that important information was concealed for a long period, and imposed a fine of 500 million won, the legal maximum for a fixed-amount penalty.

The commission also noted that the current cap on fines under the Labeling and Advertising Act is too low to be effective, and announced that it is pushing for a legal amendment to raise the limit to up to 5 billion won.

(Reported by Lee Jae-young | Video by Choi Jin-hwa | Graphics by Kim Ye-ji)
※ Please note: This article was translated by AI and may contain errors.