South Korean e-commerce leader Coupang is navigating a significant escalation in its legal and regulatory challenges. The company’s upcoming earnings report is now set against a backdrop of a major data breach investigation and a substantial class-action lawsuit, shifting investor focus from growth metrics to potential liabilities.
Earnings Anticipation Overshadowed by Legal Woes
Market participants are awaiting the release of Coupang’s fourth-quarter and full-year 2025 results, scheduled for February 24. Previously, analyst attention was centered on the firm’s expansion into Taiwan and its integration of the luxury platform Farfetch. However, the narrative has changed dramatically. Investors will now scrutinize the financial statements for any provisions related to customer compensation and regulatory fines stemming from a recent security incident. The company has already acknowledged that a compensation package for affected users noticeably increased operating costs in the latter part of the previous year. The upcoming report will reveal the full financial impact of the data scandal.
The market has reacted palpably to this uncertainty. Coupang’s shares recently declined by nearly 3%, trading at 16.50 euros, a level that places them just above their 52-week low. Technically, the stock appears deeply oversold, with a Relative Strength Index (RSI) reading of 24.9.
Deepening Data Breach Crisis and Police Probe
The core of the issue is a data leak impacting approximately 33 million customer accounts. Several law firms have reminded investors of the February 17, 2026, deadline to join a consolidated class action against the company. The lawsuit alleges Coupang misled stakeholders about its cybersecurity protocols and failed to report a significant breach in a timely manner. Reports indicate a former employee had unauthorized access to sensitive customer data for nearly six months without detection.
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The situation intensified on January 30, when Harold Rogers, the interim CEO of Coupang’s local unit, underwent a twelve-hour police interrogation in Seoul. Authorities are investigating potential obstruction of justice related to the data leak. Under South Korean law, companies found to have insufficient data protection can face fines of up to 3% of their annual revenue, posing a severe financial threat to the corporation.
Political Dynamics Complicate Regulatory Response
In a surprising twist, Coupang recently received unexpected political support. On February 1, South Korea’s Democratic Party (DP) halted plans to form a special task force intended to investigate the company’s labor and data practices.
This decision stems from diplomatic considerations. With Coupang listed on a U.S. exchange, some lawmakers worry that aggressive local regulation could be perceived as a trade barrier. This caution comes amid broader threats of 25% U.S. tariffs on South Korean imports. The critical question for investors is whether this political hesitation will be enough to restore market confidence while criminal investigations proceed.
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