"Can Customers Leave SKT Without Penalty?"... Debating Whether the Hacking Was a 'Natural Disaster' [Why&Next]

Penalty Fee Waiver Issue Expands to Choi Taewon's Hearing
Interpretation of SKT's 'Company Fault' Clause at the Center
Adequacy of SIM Card Measures Also a Key Factor
Full Waiver Not Guaranteed Even If Fault Is Recognized
Sharp Increase in Customers Leaving SKT... Up 87% from Previous Month

Following the 'SIM card crisis', the issue of 'penalty fee waivers' has emerged as the most significant point of contention in the SK Telecom (SKT) hacking incident. On April 30, lawmakers from both the ruling and opposition parties began pressuring SKT to waive penalty fees for customers who wish to discontinue SKT services but are unable to switch to another carrier due to the burden of penalty fees. In order to obtain an answer to this issue, lawmakers have summoned SK Group Chairman Choi Taewon as a witness at a hearing scheduled for the 8th.

Natural Disaster or Human Error... Legal Responsibility at the Center of the Debate

To determine whether penalty fees should be waived, the key issue is whether SKT committed a wrongful act that constitutes legal liability significant enough to justify waiving all customer penalty fees. The relevant basis is a clause in SKT's terms and conditions stating, "If the contract is terminated due to the company's fault, the penalty fee will be waived."

According to the combined opinions of three attorneys interviewed by Asia Economy, the critical question is whether this hacking incident was a 'natural disaster that occurred despite SKT's best security efforts' or a 'man-made disaster resulting from inadequate security measures and a complacent response to SIM cards, which exacerbated the damage.' This distinction will be a crucial criterion.

Myeong Hyeonjun, managing attorney at Myeongnyang Law Office, stated, "When terminating a contract, 'fault' refers to a reason that destroys the relationship of trust, making it difficult to maintain the contractual relationship as it is," and added, "The leakage of personal information alone could be seen as having broken the trust with customers." However, he also noted, "If SKT took all necessary measures, including security precautions, and the hacking occurred as an unavoidable natural disaster, it would be ambiguous to attribute full fault to SKT," emphasizing that "determining this will be a legal issue." An attorney from a major law firm, who requested anonymity, also analyzed, "If SKT's security investments were sufficient and the hacking attack exceeded technical limitations, it could be considered an unavoidable situation. However, if that was not the case, there is room to judge SKT as at fault."

Whether SKT's response regarding SIM cards was adequate is also cited as a factor in determining fault. Jeon Sangbeom, attorney at Logos Law Firm, said, "If it took customers a long time to change their SIM cards, or if it was revealed that even the SIM protection service was not secure, leaving customers unable to effectively maintain their service, then it would be practically impossible for customers to continue with SKT," adding, "In such cases, it could be legally interpreted as SKT's fault."

Scope of Waiver Separate from Existence of Fault

Even if legal review concludes that SKT is at fault, some analysts say a full waiver of penalty fees may not be immediately realized. Attorney Myeong explained, "Legal review only determines the existence of fault, while the actual scope and criteria for waivers will be decided between SKT's internal policies and social acceptability." For example, SKT may approach the penalty fee waiver by partially reducing or applying it differentially, rather than a complete waiver.

The Ministry of Science and ICT, which is in charge of investigating the hacking incident, also sees the need for a legal judgment on the penalty fee waiver controversy and has requested legal advice on the matter from three law firms. A senior official at the Ministry stated, "We have requested a legal review on how to interpret Article 43, Clause 4 of SKT's terms and conditions, which stipulates that penalty fees are waived 'if the contract is terminated due to the company's fault.'"

Since the hacking incident, the number of SKT subscribers leaving the carrier has continued to increase. According to the Korea Telecommunications Operators Association (KTOA), approximately 237,000 customers switched from SKT to other carriers in April, representing an increase of about 87% compared to the previous month. An industry insider said, "Since the implementation of free SIM card replacements, the number of SK Telecom subscribers leaving the company has surged to tens of thousands per day, hundreds of times higher than normal," and predicted, "If SKT is unable to accept new subscribers and penalty fees are also waived, SKT's status as the leading operator could be shaken."

Choi Taewon, Chairman of SK Group, appeared as a witness at the comprehensive audit of the National Assembly's Science, Technology, Information and Broadcasting Communications Committee on the evening of October 24, 2022, responding to lawmakers' questions. If Chairman Choi's attendance at the hearing is confirmed on the 8th, SKT will inevitably face full-scale political and social accountability issues, including responsibility for the hacking incident and whether penalty fees will be waived. Photo by Yonhap News