More than 400 million dollars! South Korea imposes the largest fine for data breach on e-commerce giant Coupang (CPNG.US)

South Korea will fine e-commerce giant Coupang (CPNG.US) 625 billion Korean won (approximately $4.093 billion) for a large-scale customer information leak incident and illegal collection of personal information that occurred last year. This is the largest fine South Korea has imposed on a single company for a data breach incident. The Korea Personal Information Protection Commission stated that the company, listed in New York, leaked personal data of over 33 million customers and failed to detect the leak within the legally required 72 hours. The fine is equivalent to 1.4% of Coupang's projected revenue of 45 trillion Korean won in 2025. "This incident was caused by Coupang's lack of security measures and systems, rather than a sophisticated hacker attack," said Song Kyung-hee, chairman of the South Korean privacy regulatory agency, at a press conference on Thursday. Following the announcement of the fine, Coupang apologized for the inconvenience caused to the public and customers. However, the company stated, "We regret to point out that the regulatory agency's decision does not fully reflect the proactive measures we have taken to prevent secondary damage following last year's data breach incident, as well as the explanations based on clear facts." Coupang, headquartered in Seattle, largely generates its revenue from South Korea. The company provides fast delivery services for groceries, food, and other products. Earlier this year, a South Korean government-led investigation found that the data breach incident was due to poor management. The South Korean government stated at the time that a former employee stole security keys and accessed customer accounts without authorization. Song stated that Coupang's security system allowed hackers to easily obtain personal information of all customers, even after the suspect had left the company. She also added that the company only discovered the abnormal increase in customer data traffic after receiving inquiries from customers. Moreover, Song stated that the regulator found that the company illegally collected online activity information from approximately 11 million customers without their consent. Market concerns over the investigation of the data breach incident exacerbating trade tensions between South Korea and the United States, as South Korean authorities are perceived as being too tough in dealing with this US-listed company, while the US and South Korea have been negotiating the details of a trade agreement reached last year. South Korea has pledged to invest $3.5 billion in the US, while in exchange, the US will reduce import tariffs on Korean products from 25% to 15%. South Korea stated that its investigation into Coupang is neither a trade nor security issue and should be handled separately from the ongoing trade negotiations. According to Seoul IM Securities, Coupang controls about 40% of the logistics services market in South Korea, making it the company with the largest market share among its competitors. Song said, "Coupang has achieved significant growth in e-commerce services with its vast customer data. Despite its large scale of operations, the company has not established systems to protect and manage customer information." Before the market opened on Thursday, Coupang was up 1.92% at $15.41 in pre-market trading. The stock has fallen over 30% year-to-date.