The ongoing data breach incident involving Coupang has escalated into a geopolitical issue between South Korea and the United States, potentially leading to trade retaliatory measures.
The massive data leak incident involving Coupang, a major South Korean e-commerce platform, has raised concerns that the South Korean government's response could escalate into trade and security conflicts with the United States. Adam P. Blumenthal, a senior geopolitical analyst at Bloomberg Economics and former director for Korea and Mongolia at the White House National Security Council, highlighted in a podcast that the situation, initially seen as a domestic crisis, is now being viewed through a geopolitical lens, requiring intervention at the government-to-government level between the U.S. and South Korea.
Blumenthal pointed out that there is a growing perception in the United States that South Korea discriminates against American tech companies while protecting its own. He provided specific instances, such as controversies over network usage fees for content providers like Netflix and YouTube, regulations on payment systems of Apple and Google’s App Store, and data localization policies that prevent the export of Google Maps services. He warned that the South Korean government's stringent measures towards Coupang could be interpreted as part of a broader pattern of 'targeting' U.S. companies, complicating the situation, particularly since Coupang, despite generating most of its revenue in South Korea, is legally a U.S. company.
As the U.S. House of Representatives plans to summon Coupang officials for investigations, Blumenthal expressed concern that congressional involvement could further escalate the situation, possibly leading to trade retaliatory actions, which would present significant risks for South Korea. He noted that former President Trump was quick to use tariffs as leverage when unsatisfied with trade agreement compliance and cited recent delays in South Korea's investment legislation as a potential trigger for renewed tensions. The situation remains fluid and highlights the delicate balance of diplomatic and economic relations between the two nations, emphasizing the need for careful navigation of trade policies amidst rising tensions over digital governance issues.
