Jun 01, 2016

    S. Korean firm Coupang sued for illegal delivery


    AN ASSOCIATION of South Korean logistics companies has filed civil and criminal suits against e-commerce firm Coupang, claiming that its delivery system is illegal.

    According to the Korea Integrated Logistics Association, Coupang's so-called "rocket delivery" system is in violation of the Trucking Transport Business Act because the delivery vehicles are not licensed as cargo transporters.

    Given that Coupang is an intermediary seller rather than a retailer in its own right, it does not have ownership of the products sold through its network and cannot deliver them through an unlicensed system, the association claims.

    As one of the largest online sellers in Korea, Coupang's decision to operate its own delivery system rather than contracting a logistics company represents losses of large potential profits, and sets a precedent for other sellers as well.

    "Legal logistics companies are being hurt by Coupang," the association said in a statement. "This lawsuit will penalise Coupang's rocket delivery system, which goes against fair competition."

    Coupang has maintained its position that the restriction on non-licensed delivery services does not apply to its rocket delivery system because it is offered to customers without charge.

    The suits comes after requests for an injunction to stop Coupang's delivery system were dismissed in February by the Seoul Central District Court, which said that the merits of the case should be decided through litigation.

    The court said that there were doubts as to whether Coupang's system was completely free, as customers have to pay for refund shipping.