Should Coupang Provide Adequate Compensation for Data Leak Victims?
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Synopsis
In a recent parliamentary session, South Korea's data protection chief urged Coupang to formulate a fair compensation strategy for the victims of its data breach affecting millions. The backlash against the company's voucher offer has raised concerns about the adequacy of their response to the crisis.
Key Takeaways
- Coupang is urged to implement a fair compensation strategy for data breach victims.
- The data breach exposed the personal information of 33.7 million users.
- Criticism has arisen regarding the adequacy of the company's proposed vouchers.
- The head of the data protection authority highlights the need for clearer legal frameworks.
- Coupang's compensation plan will not require victims to forfeit their right to legal action.
Seoul, Dec 31 (NationPress) The leader of South Korea's data protection authority stated on Wednesday that Coupang must devise a compensation plan that is satisfactory to those affected by its significant data breach, which has sparked widespread criticism regarding the retailer's proposal of vouchers and discounts.
Song Kyung-hee, head of the Personal Information Protection Commission, expressed this opinion during a parliamentary session concerning the company's data breach incident that impacted 33.7 million individuals—approximately two-thirds of South Korea's populace, as reported by Yonhap news agency.
"Establishing a compensation strategy that offers victims a sense of restoration is crucial. The onus is on the company to prove its case," remarked Song when questioned about Coupang's intention to provide 50,000 won (US$35) in vouchers and discounts to each affected individual.
This proposal, revealed on Monday, has faced backlash since customers can only utilize 5,000 won on Coupang's primary platform, while the remaining vouchers worth 45,000 won must be spent on other commerce sites, including one specializing in luxury items.
Critics argue that these measures appear to be designed to encourage consumers to spend more on Coupang's alternative platforms.
Regarding a potential collective lawsuit against Coupang, Song acknowledged that while the personal data protection legislation includes provisions for such suits, it does not cover monetary compensation, highlighting the necessity for a more definitive legal framework.
In the meantime, the interim CEO of Coupang, the South Korean branch of the US-based Coupang Inc., confirmed on Wednesday that the firm's compensation plan for the recent data breach would not impose any conditions requiring customers to relinquish their right to initiate lawsuits against the e-commerce company.
Responding to a query from Democratic Party's Rep. Hwang Jung-a during the parliamentary hearing, Harold Rogers, the company's interim chief executive officer (CEO), stated that the compensation would not be linked to any clauses preventing civil or criminal legal actions.
"There are no conditions associated with those vouchers, and there will not be any conditions attached," he affirmed.
He further asserted that the compensation strategy would not be used as a basis for reducing potential damages if claims are pursued in the future.
"In U.S. litigation, I do not believe that would be regarded as a mitigating factor," noted Rogers, who previously served as the chief administrative officer (CAO) of Coupang Inc., in reference to the compensation plan.
Point of View
I emphasize that the ongoing situation with Coupang underscores the urgent need for a robust framework for data protection. The company's response to the data breach must prioritize the interests of affected users while addressing the broader implications for consumer trust in e-commerce.
NationPress
07/01/2026
Frequently Asked Questions
What is the nature of the data breach at Coupang?
Coupang experienced a significant data breach that compromised the personal information of approximately 33.7 million users.
What compensation is Coupang offering to the victims?
Coupang has proposed to provide affected users with vouchers and discounts worth a total of 50,000 won (about US$35).
Why are critics unhappy with Coupang's compensation plan?
Critics argue that the compensation plan is inadequate as it limits customers to spending only a portion of the vouchers on Coupang's main platform, with the remainder needing to be used on other sites.
Is there a possibility of a collective lawsuit against Coupang?
While personal data protection laws allow for collective lawsuits, there is currently no clear legal basis for monetary damages, as noted by the head of the data protection authority.
Will customers need to waive their right to sue to receive compensation?
Coupang’s interim CEO has confirmed that there will be no conditions requiring customers to waive their right to file lawsuits in order to receive compensation.
