Coupang Corp.’s headquarters in Seoul’s Songpa District. (Ryu Woo-jong/Hankyoreh)
Even after being hit with a record 624.7 billion won (US$400 million) fine by South Korea’s data privacy regulator, e-commerce giant Coupang faces a growing list of legal and regulatory challenges, including police investigations, potential sanctions from other regulators, and class-action lawsuits from affected users.In January, police created a dedicated task force with 86 members to investigate the various allegations surrounding Coupang. In addition to last year’s massive data breach, allegations of destruction and tampering of evidence by executives, perjury by current and former executives, and the cover-up of deaths due to overwork all fall under the remit of the task force.The allegations of destruction and tampering of evidence are linked to Coupang’s claim, based on its internal investigation, that the data breach only affected 3,000 users.The police are looking into whether Coupang's unilateral public disclosures interfered with ongoing police and government investigations and whether any evidence was destroyed as a result of them. Both the current and former CEOs of Coupang Corp. — Park Dae-jun and Harold Rogers — have been charged with perjury for providing false testimony during hearings held at the National Assembly. Bom Kim, the chairperson of Coupang Inc. who refused to appear at National Assembly hearings, along with his younger brother Kim Yoo-suk, a Coupang vice president, and former Coupang CEO Kang Han-seung, are also under investigation for allegedly violating the Act on Testimony, Appraisal, etc. Before the National Assembly.The Korea Fair Trade Commission is also expected to impose a series of penalties on the retail giant. The KFTC is currently investigating allegations that Coupang bundled Coupang Eats and Coupang Play with its Wow membership package.Meanwhile, investigators from the Seoul Regional Tax Office are conducting a special tax audit into Coupang, and have already carried out on-site inspections at Coupang’s logistics subsidiary, Coupang Fulfillment Services, and at Coupang’s headquarters in May of last year. The company faces not only government administrative sanctions and police investigations, but also civil lawsuits. Multiple law firms are currently representing the victims of the data breach and pursuing claims for damages against Coupang. Meanwhile, the Personal Information Protection Commission said that it is considering the payment of compensation to users as a mitigating factor in reducing the fine imposed on Coupang.Previously, following the data breach, Coupang provided each affected user with a shopping voucher of US$35 (50,000 won). However, this compensation scheme was slammed as being unfair, as the bulk of the voucher, US$28 (40,000 won), could only be used on Coupang’s travel and luxury goods services, which are rarely used by consumers while being relatively expensive.By Seo Hye-mi, staff reporter; Kim Yoon-ju, staff reporterPlease direct questions or comments to [english@hani.co.kr]
