As Americans celebrated our nation's 250th birthday last weekend, some of our closest allies honored the occasion by illuminating landmarks in red, white, and blue. South Korea joined them, celebrating the alliance that has bound our nations together for more than seven decades. It was a welcome gesture. But in foreign policy, symbolism only goes so far. Friendly light shows cannot erase unfriendly actions.
Because while South Korea was publicly celebrating the United States, its government was privately attacking American companies – and dismissing the findings of a formal U.S. congressional investigation documenting that abuse. During my time on the House Intelligence Committee and the House China Task Force, I spent years studying how authoritarian governments use state power to pressure American businesses. I never imagined seeing an American ally adopt tactics that look so familiar.
Yet that is exactly what the Korean government is doing to Coupang (NYSE: CPNG), a Fortune 150 U.S. tech company and American exporter with major operations in Korea and throughout Asia.
The basic facts are straightforward. Late last year, a former Coupang employee improperly accessed basic user data related to customers in Korea and Taiwan – the kind of information you’d find in a phonebook, like names and addresses. He downloaded roughly 3,000 records to his computers, which soon after were recovered. None of the data was sold or misused, and no consumers suffered any harm. By any reasonable standard, this should have triggered a regulatory review, improvement plan, and perhaps a fine. In fact, that is exactly what happened in Taiwan.
But political leaders in Seoul instead chose to detonate an all-out government assault. Police repeatedly raided the company. A dozen regulatory agencies launched investigations and enforcement actions, most of which with no connection to data security. The company’s American founder was branded a “devil.” Lawmakers hauled in the company’s acting CEO – also a U.S. citizen – for days of theatrical hearings: they denied him assistance of American counsel, shouted epithets, ordered interpreters to mangle his answers, accused him of perjury for plainly truthful testimony, and threatened him with travel bans, criminal charges, and even jail time.
Officials pressured Korea’s national pension fund to dump Coupang’s stock. Lawmakers threatened to drive the company out of Korea and encouraged the public to switch to domestic competitors. The prime minister urged regulators to pursue the company “with the same determination used to wipe out mafias.” Then they fined Coupang $409 million – the largest privacy fine in the country’s history and more than four times larger than the next-highest fine imposed on a Korean company, which had exposed significantly more sensitive information.
This is the kind of conduct I spent a decade on the Intelligence Committee warning American companies about – when the country in question was China, Russia, or Iran. I never imagined it would come from an ally like Korea.
The U.S. House Judiciary Committee conducted a thorough investigation and just last week published a formal report detailing this pattern of discrimination and abuse. The bilateral trade and commercial dimensions matter, particularly given the scale of the U.S.-South Korea economic relationship. But Americans should not lose sight of the broader strategic dimension.
State-directed pressure campaigns against American companies are precisely the kind of behavior the U.S. intelligence community is trained to identify in adversarial systems. Such actions are flatly inconsistent with the principles that have long underpinned the U.S.-ROK alliance.
What does it tell us if political actors can mobilize regulators, prosecutors, lawmakers, and even the national pension fund against an American company over a routine data incident? What message does that send to other U.S. allies and partners across the Indo-Pacific?
And most importantly, what kind of message does it send to Beijing?
The Chinese Communist Party has spent years promoting the idea that American companies should be viewed as political instruments rather than commercial actors. It has encouraged governments around the world to treat successful U.S. firms as convenient political targets. When elected officials in allied countries embrace similar tactics, they validate a model that Beijing has long sought to export.
Every time an ally treats an American company as a political villain rather than a market participant, the CCP notches a win. Every time a friendly government appears willing to weaponize regulatory power against a U.S. company, Beijing’s argument against the rules-based economic order gains credibility.
The asymmetry should concern every American who cares about reciprocity. Korean firms operating in the United States – Samsung, Hyundai, LG, SK, and many others – benefit from due process, transparent regulation, and predictable enforcement. Their executives are not subjected to public political spectacles simply because politicians need a target.
If South Korea expects fair treatment for its companies in the American market, it must extend the same standard to American companies doing business in Korea.
Washington is not a passive observer. The House Judiciary Committee’s findings give Congress a compelling reason to act. Many in the Trump Administration have already raised concerns, as have some of my former Democrat colleagues like Senator Maria Cantwell and Rep. Suzan DelBene. Seoul still has an opportunity to course-correct: separate legitimate cybersecurity oversight from political theater, end all politicized enforcement actions against U.S. companies, and reaffirm that South Korea remains committed to a rules-based economy. Or Seoul can continue down a path that increasingly resembles the coercive political and economic tactics the United States has long identified in its enemies.
The current leadership in Korea must be made aware that actions such as this are seriously detrimental to our relationship. Most importantly, they weaken the American people’s resolve to protect the relationship between our two nations, creating an environment that makes Korea less stable and secure. We’re grateful for the red, white, and blue lights in Seoul – what matters more is that Seoul’s actions reflect the alliance those lights were meant to honor.
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