Coupang falls under pan-government scrutiny in Seoul despite remedy program

SEOUL, December 30 (AJP) -The South Korean government maintained that it will press ahead with a sweeping investigation into Coupang despite the e-commerce giant’s announcement of a large-scale compensation plan, vowing to leave “not a single suspicion” unresolved over a massive data breach affecting nearly all of its 34 million users. 

Deputy Prime Minister and Minister of Science and ICT Bae Kyung-hoon, who chairs a pan-government task force on the case, on Monday said the incident would be treated not only as a cybersecurity failure but also as a potential case of serious legal violations and corporate irresponsibility. 

“A company that has grown on the public’s trust cannot justify behavior that evades responsibility,” Bae said at a task force meeting. 

He said the leak of personal information involving “more than 30 million” domestic users constitutes a clear violation of the Korean law, adding that authorities will act “strictly and without exception” if wrongdoing is confirmed, applying the same standards used for all companies.

The stern stance was reaffirmed after Coupang announced a 1.7 trillion won compensation plan that drew more backlash than sympathy.  

Coupang offered to compensate users affected by the breach with vouchers worth 50,000 won ($35) each, following mounting criticism over its handling of the incident.  

The total compensation package amounts to 1.685 trillion won ($1.17 billion) to cover paid subscribers as well as non-subscribers and those who closed their accounts, according to Coupang. The vouchers will be split across multiple services on the platform: 5,000 won usable for Rocket Delivery, Rocket Direct Purchase, Seller Rocket and Marketplace purchases, 5,000 won for Coupang Eats, 20,000 won for Coupang Travel, and 20,000 won for R.LUX, the company’s luxury goods platform.

 

The compensation plan, however, has drawn mixed reactions, with consumers questioning whether vouchers — rather than cash — adequately address potential harm from a breach involving sensitive personal data. The move also comes amid mounting scrutiny over the company’s broader governance and compliance practices. 

The government has formed an unusually large interagency task force involving 11 bodies: the Personal Information Protection Commission, National Police Agency, Fair Trade Commission, Financial Services Commission, National Intelligence Service, Korea Communications Commission, Ministry of Employment and Labor, Ministry of Land, Infrastructure and Transport, National Tax Service, Ministry of Foreign Affairs, and the Ministry of SMEs and Startups.

Officials said such a broad joint response for a single company is rare, describing the case as a test of Korea’s ability to protect personal data in the platform economy while ensuring worker safety and fair market order. 

Under the coordinated probe, authorities plan to apply pressure through investigations, penalties and possible policy reforms.

The science ministry will analyze the technical causes of the breach and vulnerabilities in Coupang’s security systems. The Personal Information Protection Commission will determine the precise scope of leaked data and whether the company violated the Personal Information Protection Act. Police will analyze seized materials and work with overseas agencies to identify suspects. 

The Financial Services Commission will review risks of fraudulent transactions stemming from the leak, including whether consumers were steered toward high-interest financial products. The Fair Trade Commission said it is considering sanctions — including possible business suspension — while assessing risks of identity theft and broader consumer harm. 

The Fair Trade Commission and the Korea Communications Commission are also investigating whether Coupang’s membership cancellation process violates the E-Commerce Act or the Telecommunications Business Act, including the possible use of so-called “dark patterns” that make it difficult for users to cancel subscriptions. 

Labor authorities will conduct on-site inspections into overnight work conditions and whether adequate measures were in place to protect workers’ health. The transport ministry said it will work with the National Assembly’s Euljiro Committee to prepare institutional measures to improve conditions for Coupang delivery workers.

“This case goes beyond personal data,” Bae said. “It concerns public safety, fundamental rights and corporate responsibility.” He added that the government will respond “as one team” and pursue the investigation through to the end so the public can feel safe.