(June 11): A South Korean regulator fined the country’s largest e-commerce platform, owned by US-listed Coupang Inc, a record 624.7 billion won (US$409 million) for a wide-ranging cyber-intrusion that escalated into a diplomatic tiff with the US.
The Personal Information Protection Commission’s fine for Coupang Corp — the company’s South Korean entity — is the biggest-ever levied by the country for a personal data breach since a 134.8 billion won penalty on SK Telecom Co last year. Under Korean regulations, it can impose fines of up to 3% of annual sales.
Coupang, South Korea’s leading online retailing platform, has been under fire after regulators discovered a former employee improperly accessed personal information from nearly 34 million accounts, or about two-thirds of the country’s population, undetected for months.
“This incident was caused not by a sophisticated hacking method, but by Coupang’s inadequate basic safety management system and negligent management,” said Kyung Hee Song, the chairperson of the regulator. “The company grew rapidly by using large-scale customer data to deliver innovative e-commerce services, but investigation found that its personal information protection and management systems failed to keep pace.”
Domestic backlash against Coupang plus multiple South Korean probes into its cybersecurity measures created friction with the US. South Korean lawmakers have protested what they described as US political pressure over the treatment of the company’s executives. The e-commerce giant is based in the US and is widely popular in South Korea.
Last month, the company warned revenue growth will slow this year after the company issued vouchers to customers in response to the breach. Its shares have shed about 35% since the start of the year.
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Coupang said it regretted the regulator’s decision which “did not fully reflect Coupang’s proactive measures to prevent secondary harm following last year’s data leak.”
“Once we receive the commission’s formal written decision, we hope the facts will be clearly established through the legal proceedings,” it added in a statement released after the decision was announced. Under Korean law, the company could still challenge the ruling in court.
The committee also imposed a 248 million won fine on Coupang Fulfillment Services, Coupang’s logistics subsidiary, for unlawfully collecting personal information and using it to place individuals on an employment restriction list.
Uploaded by Felyx Teoh
