• South Korea levies a record $409 million fine on Coupang for a massive data breach.
• The breach exposed personal data of over 37 million users, including sensitive details.
• Coupang failed to report the incident within the legally required 72-hour window.

South Korea has imposed a record fine of approximately $409 million on e-commerce giant Coupang due to a major data breach that compromised the personal information of around 37.5 million customers. The Personal Information Protection Commission (PIPC) stated that the incident was exacerbated by Coupang's inadequate safety measures and poor management of authentication keys, which allowed sensitive data to be accessed unlawfully. This decision has sparked outrage among US lawmakers, leading to claims of undue pressure on South Korea's regulatory actions against American companies, particularly as Coupang is listed in the US, according to SCMP and Al Jazeera.

The PIPC highlighted Coupang's failure to notify affected individuals within the legally required 72-hour period, adding that customers were deprived of critical information necessary to mitigate secondary harm. The notification delay is particularly concerning, as highlighted by PIPC chair Song Kyung-hee, who emphasized that "this accident occurred due to Coupang's lack of safety measures," not due to any sophisticated hacking attempts, according to BBC and Al Jazeera.

The fine issued to Coupang, totaling 624.68 billion won, is by far the largest ever imposed in South Korea for a data breach, overshadowing the previous record set when SK Telecom was fined for a breach affecting over 20 million customers. The enormous monetary penalty is significantly detrimental to Coupang, as it exceeds its operating profit of 721.1 billion won for the prior year. Following the announcement, Coupang expressed regret for the concern caused to its customers and the public while indicating its intent to challenge the ruling in court, as reported by SCMP and BBC.

Moreover, the ongoing investigation has been a source of diplomatic tension, with allegations that US lawmakers are exerting pressure on South Korea regarding Coupang’s regulatory scrutiny. A letter co-signed by nearly 100 South Korean lawmakers criticized this external influence amid concerns that heavy-handed regulation might affect US businesses operating in the country. The use of the law to impose such a hefty fine has stirred discussions on the fairness and consistency of regulations impacting international companies such as Coupang, according to SCMP, Al Jazeera, and BBC.