Two major U.S. investors in Coupang Inc said on Thursday they have petitioned the U.S. government to ‍investigate the South Korean government and potentially impose trade remedies over what they describe as discriminatory treatment of the e-commerce company.

Tech investors ⁠Greenoaks and Altimeter said they have also filed arbitration claims against South Korea under the U.S.-Korea Free Trade Agreement (KORUS), accusing Seoul of mounting a campaign against Coupang following a consumer data breach that has caused billions of dollars in losses for investors.

The move comes after Coupang reported in ‌November that personal ‌data for some 33 million customers in South Korea were compromised, triggering a backlash from lawmakers and the public, which prompted a wide-ranging investigation as well as ‌lawsuits from investors and consumers.

The investors said they have asked the U.S. Trade Representative (USTR) to investigate South Korea’s actions and impose “appropriate trade remedies, potentially including tariffs and other sanctions,” arguing that the response to the breach has gone far beyond normal regulatory enforcement.

The moves could escalate a corporate dispute into a potential government-to-government trade issue, invoking U.S. trade law and an international treaty to challenge the actions of South Korean authorities.

South Korean President Lee Jae Myung, who previously called for tougher penalties after the Coupang data breach, told a news conference on Wednesday that ‌South Korea is ‍a sovereign country and will address the issue fairly according to the law and principles.

South Korea’s ‍Trade Minister Yeo Han-koo said earlier this month that the government is not ‌discriminating against Coupang and that U.S. officials had “misunderstandings,” speaking after returning from a trip to Washington where he met U.S. Trade Representative Jamieson Greer and members of Congress.

He said the “unprecedented” data leaks, followed by Coupang’s inadequate response, should be separated from trade and diplomatic issues.

GOVERNMENT ACCUSED OF SEEKING TO CRIPPLE BUSINESS

The investors allege that South Korea launched a whole-of-government response to cripple Coupang’s business, including labor, financial and customs investigations that they say bear little relation to the data incident.

“Our main concern is the scale and speed of the government’s response, which has led to significant ‍damages and threatens the value of our investment,” Marney Chee, a partner at Covington representing Greenoaks, said.

Coupang’s New York-listed shares have fallen about 27% since the company disclosed the data breach on Nov. ‍30.

The investors say ⁠they are seeking an end to ⁠what they describe as discriminatory conduct and a restoration of fair and predictable business conditions for U.S. companies doing business in South Korea.

The formal notice sent under KORUS triggers a 90-day “cooling-off” period for consultations before full arbitration proceedings can begin. Separately, USTR has up to 45 days to decide whether to launch a formal investigation, a step that could open the way for public comments, hearings and possible U.S. countermeasures, including tariffs on South Korean goods and services.

Greenoaks was founded by Coupang board member Neil Mehta. Greenoaks and related entities hold more than $1.4 billion worth of Coupang shares, according to filings.

In 2023, Coupang also partnered with Greenoaks in buying luxury fashion platform Farfetch in a $500 million deal.

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