The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired Coupang, Inc. (“Coupang” or the “Company”) (NYSE: CPNG) Class A common stock pursuant and/or traceable to the registration statement issued in connection with Coupang’s March 2021 initial public offering (“IPO”). Investors have until October 25, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Coupang is an e-commerce company that offers end-to-end e-commerce and logistic solutions.
On March 11, 2021, the Company conducted its initial public offering (“IPO”), selling 100 million shares at $35.00 per share.
On April 27, 2021, less than two months after the IPO, United Press International reported on systemic, unsafe working conditions for Coupang’s delivery drivers and employees at Coupang’s fulfillment centers, noting that nine Coupang workers had died over the past year due to an inhumane working environment. On this news, the price of Coupang shares declined by $1.83 per share, or approximately 4.02%, from $45.54 per share to close at $43.71 on April 28, 2021.
On June 17, 2021, a deadly and devastating fire broke out in the basement of the Company’s Deokpyeong Logistics Fulfillment Center, located south of Seoul. It took emergency response workers multiple days to extinguish the blaze. Tragically, one firefighter became trapped in the building and was later found dead.
On September 10, 2021, a Korea Fair Trade Commission (“KFTC”) representative announced that Coupang was participating in, and would be regulated for, search algorithm manipulation that had improperly prioritized its own products over those of third-party sellers.
On March 22, 2022, Korea JoonAng Daily reported that the KFTC had opened yet another investigation into Coupang. This time the KFTC was reportedly examining claims that Coupang had manipulated product reviews for its private-label branded products, sold through its Coupang Private Label Business (“CPLB”) subsidiary, to make them appear more positive.
On July 13, 2022, The Korea Times issued an article entitled “Coupang, Naver Hit By Antitrust Allegations,” which reported that Coupang was now also under investigation by the KFTC for falsely advertising the membership benefits of its Rocket WOW membership services.
The lawsuit alleges that, in its Registration Statement filed on February 12, 2021, the Company failed to disclose that Coupang was engaged in improper anti-competitive practices with its suppliers and other third parties in violation of applicable regulations, including: (i) pressuring suppliers to raise prices of products on competing e-commerce platforms in order to ensure Coupang’s prices would be more competitive; (ii) coercing suppliers into purchasing advertisements that would benefit Coupang financially; (iii) forcing suppliers to shoulder all expenses from sales promotions; and (iv) requesting wholesale rebates from suppliers without specifying any terms relating to rebate programs, all of which served to artificially maintain the Company’s lower prices and artificially inflate the Company’s historical revenues and market share.
Further, Coupang allegedly failed to disclose that: (i) the Company had improperly adjusted search algorithms and manipulate product reviews on its marketplace platform in order to prioritize its own private-label branded products over those of other sellers and merchants, to the detriment of consumers, merchants, and suppliers; (ii) unbeknownst to its Rocket WOW members, Coupang was selling products to non-member customers at lower prices than those offered to its Rocket WOW members; (iii) Coupang subjected its workforce to extreme, unsafe, and unhealthy working conditions; (iv) all of the above illicit practices exposed the Company to a heightened, but undisclosed, risk of reputational and regulatory scrutiny that would harm the Company’s critical relationships with consumers, merchants, suppliers, and the workforce; and (v) Coupang’s lower prices, historical revenues, competitive advantages, and growing market share were the result of systemic, improper, unethical, and/or illegal practices, and, thus, unsustainable.