"Guaranteeing Compensation for Damages in Case of Personal Information Infringement" Personal Information Commission Discusses System Improvement Directions

[Asia Economy Reporter Seulgina Jo] The government is set to improve the system to ensure that companies do not bear excessive liability for damages in the event of unexpected personal information breaches while ensuring sufficient compensation for data subjects.

The Personal Information Protection Commission announced on the afternoon of the 21st that it held the 12th Personal Information Talk Talk Relay under the theme "Improvement Directions for the Personal Information Damage Compensation Liability Guarantee System."

The Personal Information Damage Compensation Liability Guarantee System has been in effect since June 2019 to remedy user damages caused by unexpected personal information breaches. The system requires information and communication service providers, among others, to subscribe to insurance or mutual aid or to set aside reserves to fulfill their liability for damages caused by personal information breaches.

The Personal Information Protection Commission is pushing for legal amendments to expand the scope of the damage compensation liability guarantee system from "information and communication service providers, etc." with sales of 50 million KRW or more and 1,000 or more personal information storage/management cases to "personal information processors."

At the meeting, participants shared anticipated issues that may arise if the scope of application is expanded through amendments to the Personal Information Protection Act and discussed improvement measures to activate the personal information damage compensation liability guarantee system.

Regarding activation measures, the prevailing opinion was that rather than strengthening burdens and regulations on companies, it is preferable to enhance practical benefits such as providing incentives for insurance subscription by reducing fines and penalties. Additionally, there was a view that clear criteria need to be established for insurance subscription targets and exempted institutions in relation to the expansion of subscription targets due to legal amendments.

Commissioner Yoon Jong-in stated, "In the era of the data economy, unexpected breaches such as personal information leaks can occur, and large-scale damage compensation liabilities arising from them can become serious management issues that determine the survival of companies. We will listen carefully to the opinions of experts and the industry and improve the damage compensation liability guarantee system to alleviate companies' liability burdens while ensuring sufficient compensation for data subjects."

The meeting was attended by legal and academic experts such as Professor Yoo Jin-ho of Sangmyung University and Lawyer Jung Kyung-ho of Law Firm Lin, as well as system stakeholders including Kim Ji-hoon, Head of the General Insurance Association, and Chu Moon-gap, Head of the Economic Policy Headquarters of the Korea Federation of SMEs.