[THE INVESTOR] Local logistic firms on July 19 lost a civil suit against Korea’s leading e-commerce company Coupang for violating the Transport Service Act by operating its Rocket Delivery service without license.

“The Seoul Central District Court’s ruling reaffirmed our stance that we can’t be classified as a transport business. We will continue to improve our Rocket Delivery service for customers,” a Coupang spokesperson told The Investor. 

Ten logistic firms belonging to the Korea Integrated Logistics Association sued Coupang in May 2016 for operating its 24-hour delivery service without a cargo transporter license, which is mandatory for running logistic businesses in Korea.

The group argued that Coupang should be classified as a transport service, but the court ruled otherwise, meaning it is not bound by the Transport Service Act.

In 2015, logistic firms had requested the Transport Ministry to halt Coupang’s delivery system. But the the request was denied after the e-commerce company decided to suspend its paid delivery service for products under 9,800 won (US$8.73). The association had also raised similar complaints with local government agencies before filing the civil suit, which were all dismissed.

Coupang was established by Harvard dropout Kim Bom in 2010 and began its signature partially free Rocket Delivery service in 2014.

By Song Seung-hyun (ssh@heraldcorp.com)