Coupang Fined 500 Million Won for Misleading 'One-Time Coupon' Ads as Permanent Discounts

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Coupang has been fined 500 million won, the maximum legal penalty, for advertising discounts provided to paid membership subscribers as if they were permanent benefits. The Korea Fair Trade Commission (KFTC) determined that this constituted deceptive advertising that hindered consumers' rational purchasing decisions.

Lee Seonghun reports.

[Reporter]

For nearly two years starting in August 2020, Coupang advertised discount benefits applied to "Wow" members on its online shopping mall.

Coupang Wow members refer to those who have signed up for the paid membership service.

The issue was that the company advertised prices that included a discount coupon—which could only be used once upon joining the Wow membership—as if they were permanently available discounted prices.

However, consumers could not repeatedly purchase the same product at the same "Wow member price."

The Korea Fair Trade Commission (KFTC) ruled that such advertising amounted to deceptive practices that misled consumers, and it imposed a corrective order along with a 500 million won fine on Coupang.

The KFTC determined that the illegality was significant, considering that the advertisements continued for over one year and eight months and had a substantial impact, as evidenced by a sharp increase in the number of Wow members before and after the ads ended.

It was also revealed that Coupang conducted tests comparing the purchase conversion rates between displaying prices in the traditional way and displaying prices that included the one-time coupon discount to actual users.

The KFTC stated that this is the first case of sanctioning deceptive discount advertising for paid memberships on an online shopping mall, and added that it plans to push for legal amendments to raise the ceiling for such fines.

(Reported by Lee Seonghun | Video by Lee Jaeyoung | Video Editing by Choi Jinhwa)
※ Please note: This article was translated by AI and may contain errors.