Several US retailers are suing the South Korean government over the Coupang data breach

Coupang’s South Korea’s biggest data breach it has now become a geopolitical crisis as a growing number of the company’s US investors are taking legal action against the South Korean government.

What began as an investigation into a data security failure has escalated into a major controversy over the US-headquartered company’s poor performance.

Although Coupang – which operates in South Korea, Taiwan, and Japan – is often referred to as the “Amazon of South Korea,” its global headquarters is located in Seattle, Washington.

The company’s distributors are now seeking to negotiate with other countries under the US-Korea Free Trade Agreement (FTA). On January 23, 2026, US financial firms Greenoaks and Altimeter wrote a notice and South Korea’s Ministry of Justice, said they had thrown out what they saw as a discriminatory government investigation into the data breach. He also said he wants to pursue an Investment-state-Settlement (ISDS) agreement under the US-Korea FTA.

Ministry of Justice in South Korea he said Thursday that three other investors including Abrams Capital, Durable Capital Partners, and Foxhaven Asset Management have now joined the lawsuit. They said that the government did something illegal with the e-commerce company.

Recap: In December, Coupang revealed that the information of about 34 million Korean customers had been compromised in a data breach that had been going on for more than five months. The breach affected customer names, email addresses, phone numbers, shipping addresses, and other order information, the company said.

Although the technology violations in Korea resulted in less severe penalties, Coupang faced serious problems with the government. It is said that the government threatened large fines, stoppage of workand travel restrictions to management while, Coupang investors say, trying to prevent communication with people and misrepresenting violations.

Korea’s Personal Information Protection Commission (PIPC) said more than 30 million Coupang accounts were exposed – but the truth is only about 3,000 were affected, according to Coupang investors.

In December, the South Korean government and PIPC he said Coupang’s violation was too serious to warrant a higher fine. Under the current law, penalties are set at 3% of revenue, more than $800 million for Coupang, according to US investors, but some lawmakers want to raise the limit to 10% and use it repeatedly.

Even if the new law is passed, it will not apply to Coupang, since the violation occurred before the law changed. But a Democratic Party lawmaker in the country suggested imposing a fine, either through a new law or a special act of parliament, and the PIPC supported the idea, on news stories. South Korean President Lee Jae Myung also publicly cimpose severe penaltiesindicating that the company has not experienced sufficient consequences.

Depending on the information on the purpose of the reservation issued by the legal adviser of the investors, the investors argue that the actions of the South Korean government are an “unprecedented attack” on Coupang. In the letters, they argue that:

“The government’s unprecedented attack on a US company to take advantage of Korea’s competition with China is a serious violation of the Agreement, the principles of international law, and the long-term cooperation between Korea and the United States… …discrimination against the company, so US investors will be forced to seek billions of dollars to be spent in Korea to protect their investment in Coupang and deal with the violation of the Government Agreement, including confiscation of assets.

Filing is the first step, procrastinating. In South Korea Ministry of Justice now they are reviewing the target information, which is starting validity period of 90 days before the argument begins.

Coupang, Abrams Capital, and Foxhaven Asset Management did not respond to TechCrunch’s request for comment. Durable Capital Partners could not be reached.

According to investors, South Korea’s data breach situation has been inconsistent, particularly with regard to recent data breaches in South Korea, including KakaoPay, The price of SK TelecomUpbit, is Alibaba’s AliExpress.

KakaoPay claims to have transferred 54 billion customer records to Alipay Singapore, but it still suffered fine of only $10 million it’s a CEO warning, right SK Telecom was fined $91 million after a serious breach of the SIM card. Upbit and AliExpress And the government did nothing. The vendors say these models show a big difference from what the government did in Coupang.

South Korea’s Ministry of Science and ICT said on Wednesday that the data breach at Coupang was carried out by a former employee who had worked on the company’s authentication system and was aware of weaknesses in authentication and key management.

The ministry said Coupang failed to report the breach to the Korea Internet & Security Agency (KISA) within 24 hours and did not fully implement the November 2025 data retention plan, which led to the removal of important websites and software logs. The ministry sent the matter to investigators and ordered Coupang to submit a ban plan by February 2026, and be reviewed until July.

Coupang issued a statementsaying the employee, who is a Chinese national, had access to more than 33 million account details but kept about 3,000 before deleting them, and that no sensitive information such as payments, passwords, or government IDs.

Coupang also replaced the CEO, Dae-jun Park and Harold Rogers, the general attorney of its US parent, in December.

Adam Farrar, senior associate at CSIS and APAC geoeconomics analyst at Bloomberg, said. Tuesday’s Impossible State podcast that what started as a major data breach involving Coupang has grown into a major issue between the United States and South Korea.

Farrar said the case widens many U.S. claims of bullying American companies, raising trade and tax risks for South Korea. the US Congress they are very busy.

“The massive data breach (by Coupang) led to many investigations in the National Assembly and a lot of controversy with Coupang and several administrations over the past few months,” Farrar said in the podcast. “What is added here is that Coupang, driving almost all of its revenue from Korea, is now a US company that adds power to both sides, which affects how it is perceived and perceived.”

The story will continue to Coupang, raising more questions about whether South Korea is targeting US companies unfairly, Farrar continued.

Critics point to digital policies that they say favor domestic companies, including network usage fees for content they provide. Netflix, Apple’s App Store and Google Play Payment rules are necessary to interpret the data which reduces the work such as Google Maps for reasons of national security.