South Korean e-commerce company WeMakePrice announced on June 16 that it has recently filed a complaint with the Fair Trade Commission (FTC) against its major competitor Coupang over a suspected violation of the laws on the distribution business and fair trade. An intensified price war between the two industry leaders seems to be transforming into a legal battle.
WeMakePrice claimed on June 16 that Coupang obstructed WeMakePrice’s marketing campaign by using its superior market power and unfairly transferred the cost of price discounts to suppliers.”
WeMakePrice said it launched a lowest-price campaign on April 30 guaranteeing that the prices it charges for daily necessities are the lowest among all of its competitiors; if not the store will give customers cash rewards twice the differences in prices between the firm and Coupang. Not much later, however, its major business partners stopped supplying goods without any particular reason and refused to support the marketing campaign. The firm suspected that this was the result of undue influence by Coupang, which felt threatened by an increase in sales at WeMakePrice following the aggressive marketing campaign.
WeMakePrice asserted that Coupang also lowered the prices of its products and forced its business partners to pay the losses incurred due to the price cuts. The company said it reported to the FTC after it interviewed its business partners and concluded that there were Coupang’s unfair practices that went against the current law.
In response, however, Coupang said, “It is impossible for us to pass the costs of discounts to our business partners under our inside policy.”