Greenoaks and Altimeter, U.S. information technology (IT) investment firms that hold shares in Coupang, have petitioned the Office of the United States Trade Representative (USTR) to take trade remedy action, asserting that they suffered major losses because of what they describe as discrimination by the Korean government against Coupang. They also stated that they sent a notice of intent to commence investor-state dispute settlement (ISDS) arbitration against the Korean government.

Because this could trigger direct involvement by the U.S. government, there are concerns that it may differ in nature from the Congressional complaints to date that have been driven by Coupang lobbying.

On the 22nd (local time), the investors said in a press release that they had asked the USTR to investigate measures taken by the Korean government concerning Coupang and, based on Section 301 of the Trade Act, to impose appropriate trade remedies, including tariffs and other sanctions. They argued that, following a personal information leak at Coupang, Korean authorities have waged a campaign targeting Coupang, causing investors to suffer losses in the billions of dollars.

The investors also asserted in a notice of arbitration sent to President Lee Jae Myung and Jeong Hong-sik, Director General of the International Legal Affairs Bureau at the Ministry of Justice, that “the personal information leak is merely a pretext; in reality, as Coupang eroded the market share of large Chinese corporations in Korea that maintain close ties with President Lee, the Korean government mobilized multiple agencies simultaneouslyincluding the Fair Trade Commission, National Tax Service, Financial Supervisory Service, and Ministry of Laborto target Coupang.” This appears to be a strategy to attach a ‘pro-China frame’ to the president to draw intervention from the Trump administration.

They went on to claim that such a response by the Korean government is “arbitrary conduct typically observed in authoritarian states and has been recognized in international arbitration as indicative of ‘indirect expropriation’.”

They further cited as an example of excessive response a remark by Prime Minister Kim Min-seok that “law enforcement regarding the Coupang leak incident should be undertaken with the same resolve as when wiping out the mafia.” In fact, in a December briefing last year, the prime minister made that request to financial supervisory bodies to strictly restore market order without mentioning Coupang, but the investors linked the remark to Coupang.

The U.S. outlet Axios noted that “it is highly unusual for American venture investors to bring suit against a foreign government,” and warned that “the move could create a rift between the United States and South Korea.” It added, “other Coupang investors may additionally join the two investors’ actions.”

Greenoaks holds more than $1.1 billion (about 1.6115 trillion won) in Coupang shares and claims to have suffered hundreds of millions of dollars in losses due to discriminatory measures by the Korean government. Greenoaks founder Neil Mehta is also a current Coupang director. He joined the Coupang board in 2010, founded Greenoaks in 2012, and has served as managing partner ever since.

Altimeter’s Coupang holdings are valued at $210 million. Brad Gerstner, the founder of Altimeter, leads a nonprofit policy initiative called ‘Invest America’ and was the figure who spearheaded the so-called ‘Trump Accounts’ policy. The Trump Accounts program is a policy under which the U.S. government would open investment accounts for children and enable early investment in the stock and capital markets to help build assets. The policy was reflected in the ‘One Big Beautiful Bill’ that took effect last July. President Trump, expressing satisfaction with the ‘Trump Accounts’, publicly praised Gerstner as “a business leader who actively participated in our policies.”

Section 301 of the Trade Act, under which Coupang investors petitioned the USTR for an investigation, authorizes the executive branch to respond when a foreign government violates a trade agreement with the United States or restricts U.S. trade through unreasonable and discriminatory practices. Any interested party may petition for an investigation, and the USTR must decide within 45 days of receipt whether to initiate one. Accordingly, the Trump administration will likely have to define its position on the Coupang matter in some fashion within the next 45 days.

If the USTR decides to open an investigation, it will begin consultations with the Korean government. If consultations do not yield the desired outcome and the investigation determines that U.S. rights have been infringed, the USTR may retaliate against Korea with tariffs or other measures restricting imports. The issue could grow larger if, in launching the investigation, the USTR looks beyond Coupang and challenges Korea’s digital regulatory framework as a whole. The Trump administration has also expressed concern that both the Online Platform Act debated in the Korean National Assembly and the recently enacted Disinformation Eradication Act (amendments to the Information and Communications Network Act) discriminate against U.S. companies.

The arbitration application filed against the Korean government entails a 90-day ‘cooling-off period’ befor full proceedings begin. If the Korean government does not accept the demands of the party seeking arbitration during this period, a hearing starts after 90 days.