An imminent ruling on a two-year-old hacking case involving Auction, which now enjoys a virtual monopoly in the nation's online open market after taking over Gmarket, is expected to set a precedent in many ways, not least of all about how tolerant the nation will be regarding online businesses. This ruling could make or break the future of the country's Internet business. ― ED.
By Park Si-soo
Staff Reporter
A Seoul court is expected to make a ruling Thursday on the largest private information leakage case involving the online open market site, Auction, owned by eBay. The system was hacked into in February 2008.
The company and the authorities estimate that nearly 10.81 million or 60 percent of all registered users of Auction (www.auction.co.kr) had their private information including ID numbers, home addresses, phone numbers and even bank accounts exposed to strangers by hackers allegedly from China.
Of them, 146,000 users have taken a class action against the online auction company, each demanding between one and three million won ($880-$2,650) in compensation. Police failed to identify and catch those who penetrated the company's firewall.
What the cyber attack left behind was a long, drawn out court battle between two "victims" ― Auction and its affected users.
The plaintiffs tried to prove that they had sustained damage as a result of the leak, citing an increase in the number of what appeared to be fraudulent calls to their mobile phones following the incident.
Auction, which was taken over by eBay in 2001, tried to defend itself on the basis that the cyber attack and resultant information leak was an unavoidable "rite of passage" for Internet-based companies at home and abroad.
"It is certain that no company is 100 percent free from malicious hacker’s attack technically," said an Auction spokesman. "At the time of the incident, we were using a state-of-the-art firewall whose defense capability was not inferior to that of the world's most popular commercial Web sites. If the court holds us responsible, online marketplaces like Auction will lose business, in turn causing a significant impact on the IT industry in general."
The spokesman said the Auction case stands different from other encounters of information leakage, as it can be considered a victim of a hacking incident.
Lim Sung-geun, a presiding judge of the case, has remained tight-lipped. Given past rulings on similar cases, however, it's very likely that Auction will be held partially liable.
In November 2008, the Seoul High Court ordered Kookmin Bank to pay 200,000 won in compensation to nearly 1,000 online clients, whose private information was leaked. LG Electronics was also ordered to pay 700,000 won to those who uploaded their private information on its recruitment Web site, whose firewall was also breached. No matter how little the compensation to each user may be, the Auction spokesman says, it could pose a grave threat to its bottom line.
"If the plaintiff wins, it's possible that the remaining 10 million people who have taken no legal action against us as yet would follow suit," the Auction spokesman said.
According to a quarterly report the company submitted to the state financial watchdog in November last year, it had capital of 108.7 billion won as of Sept. 30.