Seminar Presentation Materials by Yang Gijin, Professor at Jeonbuk National University Law School
[Asia Economy Reporter Eunbyeol Kim] Concerns have been raised over the Electronic Financial Transactions Act (hereinafter referred to as the EFTA) amendment bill, scheduled to be processed by the government and ruling party in the February extraordinary session of the National Assembly, as it mandates big tech companies to provide all transaction information to the Korea Financial Telecommunications and Clearings Institute (KFTC) and exempts them from the application of the three major personal information protection laws. The bill requires big tech companies like Naver Pay to report electronic payment transaction information without customer consent.
Professor Yang Gijin of Jeonbuk National University Law School stated in his presentation at the "2021 Joint Economics Academic Conference Financial Informatics Seminar" on the 4th that "if the EFTA amendment bill passes, personal information related to electronic payment transactions could be concentrated without any restrictions from relevant laws."
Professor Yang pointed out issues with the newly established electronic payment transaction clearing obligation (Article 36-9) in the amendment. This provision mandates electronic financial business operators (big tech companies) to provide electronic payment transaction information to the electronic payment transaction clearing institution (KFTC) and exempts them from the application of major personal information protection laws.
The relevant legal provisions exempted include ▲ Article 4 of the Real Name Financial Transactions Act (Confidentiality of Financial Transactions) ▲ Articles 32 (Consent for Provision and Use of Personal Credit Information) and 33 (Restrictions on Use of Personal Credit Information) of the Credit Information Use and Protection Act ▲ Article 18 of the Personal Information Protection Act (Restrictions on Use and Provision of Personal Information for Purposes Other Than Intended), among others. Additionally, related provisions of laws prescribed by Presidential Decree are also not applied.
Professor Yang explained, "The information provided by big tech companies includes internal transactions, which is unprecedented globally." Simply put, when purchasing goods or services using Naver Pay points, Naver must mandatorily report all transaction information to the KFTC without obtaining customer consent for the provision and use of personal information.
He also expressed concern that transaction information collected by the KFTC could be provided to external profit-seeking companies. The Financial Services Commission previously announced in July last year that it plans to open 'financial clearing information' held by the KFTC to the private sector after de-identification.
Professor Yang pointed out, "The Financial Services Commission will allow the information collected by the clearing institution to be de-identified and provided to private companies," warning that transaction information could be used or provided beyond the intended purposes, posing a threat to personal information protection. He said, "Excessive concentration of personal information in the clearing institution and how this database is used raises significant concerns about information abuse," adding, "There is a high risk of a Big Brother controversy." He also noted that concentrating transaction information in one place could make it vulnerable to hacking.
Furthermore, he emphasized, "Allowing personal information to be concentrated externally and utilized without the consent of the parties involved may also violate the constitutional principle of guaranteeing individuals' right to informational self-determination."
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