Volkswacht Bodensee - South Korea e-commerce probe opens rift in US ties

US-listed Coupang's South Korean arm operates the country's most popular shopping platform.

But it has faced a backlash since a massive data leak last year exposed the details of over 30 million customers.

South Korean authorities are investigating Coupang for potential negligence and regulatory breaches, and statements from Seoul and Washington this week revealed cracks in the relationship between the longtime allies.

On Thursday, South Korea's foreign ministry said the Coupang probe was "being conducted in strict accordance with our domestic laws and due process", adding that it was not discriminating against American firms.

The statement followed a letter by Republican lawmakers to the South Korean ambassador in Washington, in which they called for an end to "discriminatory regulatory actions" against US businesses.

The letter claimed that South Korea "leveraged a low-sensitivity data leak... as a pretext to launch a whole-of-government assault on Coupang".

It accused Seoul of "indiscriminate raids... punishing fines, unprecedented tax audits, and pressure on public pension funds to divest their Coupang holdings".

The evident strain is remarkable given that South Korea and the United States are major economic and defence partners, with Washington stationing 28,500 troops there to help guard against North Korea.

On Wednesday, Seoul said talks with Washington over a security agreement should proceed separately from issues related to Coupang.

The unusual statement came after multiple South Korean media outlets reported that the United States had threatened to halt high-level security talks unless Seoul guaranteed the legal safety of Coupang Chairman Kim Bom, an American citizen also known as Kim Bom-suk.

The reports said that US negotiators had asked South Korea to lift a travel ban on Kim and ensure that he would not face arrest or detention when visiting the country.

The talks carry high stakes for South Korea, as they would touch on its plan to build nuclear-powered submarines as a deterrent against the North.

Coupang declined to confirm Kim's current whereabouts. South Korea has not confirmed that Washington made any such demands regarding Kim or linked them to the security talks.

M.Betschart--VB