U.S. Investors Sue South Korea Over Coupang Data Breach; FTA ISDS Looms

U.S. investors are escalating legal action against South Korea under the Korea–U.S. Free Trade Agreement (FTA) after Coupang’s massive data breach in December 2025. On January 23, 2026, Greenoaks and Altimeter filed a notice of intent for investor-state dispute settlement (ISDS) arbitration, joining Abrams Capital, Durable Capital Partners, and Foxhaven Asset Management. The investors allege discriminatory government investigation and treatment, including threats of heavy fines, operational suspension, and travel bans for executives, hindering public communication. South Korea’s Ministry of Justice is reviewing the notice, triggering a 90-day consultation before formal arbitration. The breach, disclosed by Coupang, involved about 34 million Korean customers’ personal data, but the company and its U.S. parent claim only roughly 3,000 accounts were affected. The Ministry of Science and ICT alleges noncompliance with data preservation orders and referred the matter to investigators, ordering a prevention plan by February 2026. Analysts warn the case could amplify broader U.S. concerns about unfair treatment of American tech firms in South Korea and escalate trade tensions. Coupang replaced its CEO in December with Harold Rogers, its U.S. parent’s top lawyer.