Lee calls for tougher penalties as Coupang privacy breach scandal deepens

President Lee Jae Myung speaks during a policy briefing by the Ministry of Science and ICT and the Personal Information Protection Commission in Sejong City, Friday. Yonhap

President Lee Jae Myung on Friday called for tougher penalties on companies that experience recurring personal data breaches, saying too many firms flout the rules without fear of consequences — a comment widely interpreted as alluding to high-profile lapses at e-commerce giant Coupang.

He proposed imposing fines equal to 3 percent of a company's highest annual revenue over the past three years, while the Personal Information Protection Commission (PIPC) said it is seeking to introduce a punitive system to address repeated personal data leaks.

Speaking at a policy briefing by the information privacy watchdog, the president said that companies must face consequences severe enough to make them fear going out of business if their negligence harms the public.

"If you violate these rules, it should be a huge problem," he said. "But right now, companies seem to think, 'What are you going to do about it?' even after breaking them."

Under current law, companies can be fined up to 3 percent of their total annual revenue for data breaches, calculated based on the average revenue of the past three years.

After hearing this, Lee said the framework seemed weak and called for tougher measures. He proposed calculating fines based on the highest annual revenue over the past three years, rather than the average.

PIPC Chairperson Song Kyung-hee said the agency is considering a plan to impose fines of up to 10 percent of a company's revenue for serious or repeated violations.

Although the president did not name a specific company, his remarks appeared to point to e-commerce giant Coupang, which is under fire over a recent massive data breach that exposed the personal information of nearly 34 million people, or roughly three-quarters of the nation's adult population.

In an apparent reference to the Coupang case, the president said that introducing a class-action lawsuit system is essential and urged authorities to speed up related legislation.

Coupang has replaced the head of its Korean unit as it confronts the fallout from the massive data breach — a move widely seen as an effort to shield its founder and chairman, Kim Bom-suk, also known as Bom Kim, from mounting domestic criticism ahead of a Dec. 17 National Assembly hearing.

Coupang Inc., the U.S.-based parent of Coupang Corp., has appointed its chief administrative officer and general counsel, Harold Rogers, as interim CEO of the Korean unit, tasking him with leading the company’s response to the crisis.