Coupang compensation may rise to $11.4 bil., lawmakers consider stronger legal penalties – The Korea Times
Coupang Corp. CEO Park Dae-jun, second from left, listens during questioning by the National Assembly's National Policy Committee regarding a massive data leak of the personal information of 33.7 million customers, Wednesday. Newsis
E-commerce giant Coupang is facing increasing pressure over compensation liability following a data leak in which the personal information of 33.7 million customers was breached by a former employee.
With potential legal costs estimated to reach as high as 16.8 trillion won ($11.44 billion), the number of customers joining class action suits to demand damages continues to rise.
The Personal Information Protection Commission (PIPC), the country's personal data watchdog, is already signaling it will impose a separate penalty worth up to 1.2 trillion won, implying the breach is one of the most significant in the company's history.
As public and political calls intensify for severe penalties against Coupang, the potential for lawsuits against the firm is also brewing. Already, a law firm has filed a complaint against Park Dae-jun, CEO of Coupang Corp., the Korean unit of the U.S.-listed parent company. Bom Kim, Coupang's founder, has so far maintained his silence.
As of Friday, more than 500,000 people have signed up across more than 20 online communities to prepare class action suits against Coupang. A number of law firms have already filed suits demanding 200,000 to 300,000 won in damages per person.
Lawyers and industry officials generally suggest that legal precedents indicate compensation could be assessed at 100,000 won per person. In 2016, a Seoul court imposed payments of 100,000 won per person for victims of a 2014 data leak incident involving credit card companies, and the country's courts have since used the same amount as the upper limit in similar cases.
If all 33.7 million affected Coupang customers join a class action suit and are each awarded 100,000 won, the total damages could reach 3.37 trillion won.
Korea's Personal Information Protection Act allows courts to impose punitive damages of up to five times the compensatory damages awarded in cases where personal information is stolen due to negligence. In that case, Coupang’s total compensation liability could reach as high as 16.8 trillion won.
However, chances are slim that prosecutors will seek such a high amount, because the five-time penalty has never been applied in court due to a clause that provides exemptions if the company proves there was no or gross negligence or intent.
During questioning by the National Assembly’s National Policy Committee on Wednesday, Park said victims of the breach will be compensated. However, he declined to share a specific plan to do so, citing the ongoing investigation.
Lawmakers are pressuring the PIPC and the government to take more punitive measures against Coupang.
The PIPC is currently reviewing Coupang's practices. Under current laws, companies can be slapped with penalties worth up to 3 percent of their entire sales for a year. The firm’s sales last year came to 41 trillion won, which would lead to a potential maximum penalty of 1.23 trillion won.
Lawmakers are arguing that 3 percent is too small an amount compared to the profits companies earn. Rep. Kim Seung-won of the Democratic Party of Korea has tabled a revision to the Personal Information Protection Act to raise this upper limit to 4 percent.
The law firm Daeryun on Friday said it had filed a complaint with Songpa Police Station against Park for violating the Personal Information Protection Act and breach of duty.
Daeryun said the company allowed a former Chinese employee, who is the main suspect in the data breach, to leave the firm without returning his authorized access to the company’s database, adding that Coupang also did not promptly react when it first discovered the leak.
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This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
E-commerce giant Coupang is facing increasing pressure over compensation liability following a data leak in which the personal information of 33.7 million customers was breached by a former employee.
With potential legal costs estimated to reach as high as 16.8 trillion won ($11.44 billion), the number of customers joining class action suits to demand damages continues to rise.
The Personal Information Protection Commission (PIPC), the country's personal data watchdog, is already signaling it will impose a separate penalty worth up to 1.2 trillion won, implying the breach is one of the most significant in the company's history.
As public and political calls intensify for severe penalties against Coupang, the potential for lawsuits against the firm is also brewing. Already, a law firm has filed a complaint against Park Dae-jun, CEO of Coupang Corp., the Korean unit of the U.S.-listed parent company. Bom Kim, Coupang's founder, has so far maintained his silence.
As of Friday, more than 500,000 people have signed up across more than 20 online communities to prepare class action suits against Coupang. A number of law firms have already filed suits demanding 200,000 to 300,000 won in damages per person.
Lawyers and industry officials generally suggest that legal precedents indicate compensation could be assessed at 100,000 won per person. In 2016, a Seoul court imposed payments of 100,000 won per person for victims of a 2014 data leak incident involving credit card companies, and the country's courts have since used the same amount as the upper limit in similar cases.
If all 33.7 million affected Coupang customers join a class action suit and are each awarded 100,000 won, the total damages could reach 3.37 trillion won.
Korea's Personal Information Protection Act allows courts to impose punitive damages of up to five times the compensatory damages awarded in cases where personal information is stolen due to negligence. In that case, Coupang’s total compensation liability could reach as high as 16.8 trillion won.
However, chances are slim that prosecutors will seek such a high amount, because the five-time penalty has never been applied in court due to a clause that provides exemptions if the company proves there was no or gross negligence or intent.
During questioning by the National Assembly’s National Policy Committee on Wednesday, Park said victims of the breach will be compensated. However, he declined to share a specific plan to do so, citing the ongoing investigation.
Lawmakers are pressuring the PIPC and the government to take more punitive measures against Coupang.
The PIPC is currently reviewing Coupang's practices. Under current laws, companies can be slapped with penalties worth up to 3 percent of their entire sales for a year. The firm’s sales last year came to 41 trillion won, which would lead to a potential maximum penalty of 1.23 trillion won.
Lawmakers are arguing that 3 percent is too small an amount compared to the profits companies earn. Rep. Kim Seung-won of the Democratic Party of Korea has tabled a revision to the Personal Information Protection Act to raise this upper limit to 4 percent.
The law firm Daeryun on Friday said it had filed a complaint with Songpa Police Station against Park for violating the Personal Information Protection Act and breach of duty.
Daeryun said the company allowed a former Chinese employee, who is the main suspect in the data breach, to leave the firm without returning his authorized access to the company’s database, adding that Coupang also did not promptly react when it first discovered the leak.
source
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
