Coupang announces $1.18-billion compensation to South Korean users for data leak

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Criticism mounts over Coupang's decision to provide compensation in the form of vouchers that can only be used on its own services and platforms

SEOUL, South Korea – South Korean e-commerce company Coupang announced on Monday, December 29, a compensation deal worth 1.69 trillion won ($1.18 billion) to holders of 33.7 million accounts for a massive data leak that triggered a backlash from users and lawmakers.

Coupang said customers will get company vouchers of 50,000 won each.

The plan comes a day after Coupang founder Kim Bom issued his first public apology for last month’s data breach and pledged to expedite compensation measures. However, Kim has declined to attend parliamentary hearings scheduled for Tuesday and Wednesday, citing prior commitments.

However, criticism has mounted over Coupang’s decision to provide compensation in the form of vouchers that can only be used on its own services and platforms.

Choi Min-hee, a lawmaker of the ruling Democratic Party and chair of the National Assembly’s Science, ICT, Broadcasting and Communication committee, said in a Facebook post that Coupang was “bundling coupons for services no one uses,” criticizing the company for offering vouchers tied to its less popular services.

She added that Coupang appeared to be trying to turn the crisis into a business opportunity.

Consumer advocacy group Korea National Council of Consumer Organizations said Coupang’s plan made a mockery of consumers and downplayed the severity of the data breach, describing it as a marketing tool designed to encourage additional purchases rather than as a sign of restitution.

When asked about public criticism of its compensation plan, Coupang said it had no further comment.

South Korea’s parliament plans to hold two days of hearings on Coupang starting on Tuesday. – Rappler.com