The government on Wednesday vowed to take “all available legal measures” against Coupang Inc. over its recent data leak, condemning the US e-commerce giant’s lukewarm response in addressing the issue during a parliamentary hearing.
“The company’s lukewarm and passive attitude in explaining the situation during the parliamentary hearing, and its attempts to underestimate the damage and dodge responsibility, are further fueling public concern and distrust,” the government said in a joint statement with relevant agencies.
“The government will not stand by and will review all available legal measures,” it added.
Science Minister Bae Kyung-hoon, who heads the government task force investigating Coupang, condemned the company for failing to faithfully cooperate with the government in the ongoing investigation.
“Coupang says only 3,000 accounts were leaked and later deleted, but this is an extremely reckless remark,” Bae said, noting that the company is directly quoting the suspect’s testimony.
The remarks come after Coupang, citing its own investigation, claimed the breach had only affected some 3,000 user accounts, instead of over 33.7 million it initially reported late last month.
Coupang argued its investigation had been conducted in close consultation, if not under supervision, of the government, but Seoul quickly rejected Coupang’s claims, calling them a “unilateral” conclusion of a still ongoing investigation.
“While they claim that information from 3,000 accounts was deleted, the data can still be stored somewhere. If it is kept on a cloud platform, it is even harder to trace,” Bae said, adding that such information could be used for cyberattacks.
Bae said although the government asked Coupang to preserve relevant data, the company allowed website access logs to be deleted over a five-month period, which constitutes a violation of the law.
“Coupang should have disclosed fact-based investigation findings or plans for compensation. We urge the company to faithfully fulfill its role as the subject of the investigation,” he added.
“If the investigation uncovers any problems, we plan to impose punitive measures to set an example,” the minister said.
During the session, Lee Jae-gul, a legal official at Coupang, said the company was contacted by three officials from South Korea’s spy agency while retrieving a laptop owned by a former employee suspected of being behind the data leak from a river in China.
Lee said while Coupang did not disclose the results of its own investigation under the direction of the National Intelligence Service (NIS), the agency was aware of the content of the announcement.
“We learned that the laptop was underwater from the suspect’s explanation, and we immediately shared the information with the NIS,” Lee said, noting that the agency strongly insisted on retrieving it.
Lee added that Coupang made a unilateral announcement due to false information circulating in South Korea, saying the company felt it was necessary to inform the public that the data had been retrieved to prevent secondary damage.
The head of South Korea’s Fair Trade Commission (FTC), meanwhile, said the antitrust regulator could consider temporarily suspending the business operations of Coupang over a recent large-scale consumer data breach.
“With a joint public-private investigation currently under way, authorities are examining what information has been leaked, what damage is expected and whether Coupang can take appropriate measures to compensate victims,” FTC Chairman Ju Biung-ghi said.
“If necessary, we can consider penalties up to and including a suspension of business operations,” he added.
Rep. Hwang Jung-a of the ruling Democratic Party said public anger is mounting amid growing calls for the government to suspend Coupang’s operations.
Prompting further public anger, Coupang announced a claimed 1.69 trillion-won ($1.17 billion) compensation package for all its users, which has been rejected by many as an “attempt to turn the incident into a promotional event” as the 50,000 won per person package consists largely of vouchers that require subscription and fresh, considerable purchases.
The U.S.-listed firm has also been suspected of seeking to prevent, if not bar, users from seeking further legal compensation through its compensation program.
When asked, Harold Rogers, interim chief executive officer (CEO) of Coupang Corp., the South Korean unit of Coupang, said that was not the case.
“There are no (such) conditions in those vouchers, and there will not be any conditions in those vouchers,” he told the parliamentary hearing.
Rogers added the compensation plan will not be used as grounds to seek a reduction in potential damages should claims be filed in the future.
Rogers, meanwhile, said it was “not my place to instruct” Coupang founder Kim Bom-suk to attend a parliamentary investigation into the case, in response to a lawmaker’s request that he convey the call for Kim to attend.
“Kim Bom-suk, the chairman (of Coupang’s board), who bears fundamental responsibility and duty for the incident, remains absent, and the company obstructed the parliamentary hearing with a foreign representative with no real authority,” Rep. Choi Min-hee of the ruling Democratic Party said.
Choi, who presided over the parliamentary hearing, added the National Assembly will take all necessary actions in cooperation with the government, including an immediate suspension of operations.
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