Coupang Crisis Escalates into the New Year... "Bill for Contempt" on the Way

Lukewarm Attitude at Joint Hearing, Bom Kim's Absence
Ruling Party and Government Submit Request for Parliamentary Investigation
Focus on Personal Data Leak and Overall Corporate Misconduct
Momentum Builds for Class Action Lawsuits and Puni

The aftermath of Coupang's massive personal data breach is intensifying at the very start of the Year of the Fire Horse. Both political circles and government authorities are targeting the Coupang management's inappropriate response to the incident, signaling their determination to mobilize all legislative and administrative measures to the end. As a result, the Coupang situation is escalating into the new year.

Democratic Party lawmakers Kim Hyun, the spokesperson of the Science, ICT, Broadcasting and Communications Committee, Kim Young-bae, the spokesperson of the Foreign Affairs and Unification Committee, and Kim Hyunjung, the floor spokesperson, submitted a request for a national investigation into Coupang to the National Assembly Secretariat on December 31 last year. [Joint Coverage]

According to political circles and related industries on January 2, the National Assembly, led by the Democratic Party, submitted a request for a national investigation into Coupang's overall illegal corporate activities on December 31. This follows two days of joint hearings by six standing committees on December 30 and 31 regarding the Coupang breach incident. During these hearings, Coupang maintained a lukewarm attitude, and Kim Bomseok, Chairman of the Board of Coupang Inc. and founder, repeatedly refused to comply with the National Assembly's summons. Lawmakers concluded that there had been no responsible explanation from Coupang's top decision-maker.

According to the request for a national investigation proposed by 133 ruling party lawmakers, a special committee of 20 members, appointed in proportion to the seats held by negotiating and non-negotiating groups, would address the causes and scale of the Coupang personal data breach, as well as the entire response process. There is also a proposal to investigate allegations of unfair trade, including Coupang's alleged monopolistic practices in the online market and consumer deception.

Furthermore, the investigation is expected to cover a wide range of issues, including repeated worker deaths at Coupang's logistics and delivery centers, suspicions of concealed industrial accidents, corporate governance problems, tax evasion allegations, and suspicions of domestic and overseas political lobbying. During the previous joint hearings, Coupang's interim CEO, Harold Rogers, claimed that the company had conducted and announced the investigation into the personal data breach under the instructions of the National Intelligence Service. However, the National Intelligence Service refuted this as false. As a result, the investigation will also address the issue of perjury before the National Assembly, including this matter.

The Coupang incident has also triggered a full-fledged legislative push to introduce class action lawsuits and punitive damages systems. A representative example is the class action bill proposed by Democratic Party lawmaker Kim Namgeun and 19 other ruling bloc lawmakers. The bill stipulates that a public interest organization that has engaged in victim relief or prevention activities for a certain period and has obtained litigation authorization from more than 100 victims can file a "liability confirmation lawsuit" against the offending large corporation. Based on this, victims would be able to seek relief through a damage claim registration process. The bill also specifies that large corporations that conceal the truth or recklessly delay the confirmation of liability and compensation must pay punitive damages of up to five times the amount of damages.

The proposed bills also include the introduction of a Korean-style "discovery" system, under which all parties in a class dispute must share all case-related materials and records. Plaintiff organizations would be able to request preservation orders for evidence, expert fact-finding, and out-of-court witness examinations by the parties (or legal representatives) for evidence necessary to prove the liability of the offending corporation and the amount of damages. Assemblyman Kim explained, "In class disputes between large offending corporations and numerous victims, most of the evidence regarding the corporation's liability and concealment or reckless delay is concentrated within the corporation. The introduction of the 'Korean-style discovery' system is intended to resolve this uneven playing field."

In addition, 14 opposition lawmakers, including Park Sangwoong of the People Power Party, have proposed a partial amendment to the Act on Fair Transactions in Large-Scale Distribution to shorten the payment period for large-scale distributors. The amendment would reduce the payment deadline for special contract purchases from 40 days to 20 days from the end of the monthly sales closing, and for direct purchases from 60 days to 30 days from the date of product receipt. This proposal reflects industry criticism that Coupang's 60-day settlement cycle is longer than that of other online and offline distributors.

The pan-government task force for the Coupang incident also plans to thoroughly investigate the breach and personal data leak, user protection, labor and safety, market order, and internal transactions, based on suspicions raised during the hearings. Each relevant ministry will closely examine Coupang's potential legal violations and take strict action if any are found. The police have also formed a task force to comprehensively review allegations related to Coupang.

Bae Kyunghoon, Deputy Prime Minister for Science and Minister of Science and ICT, who heads the pan-government task force, emphasized, "The entire government will act as one team to ensure that not a single suspicion remains, responding thoroughly to the end and disclosing everything transparently so that the public can feel safe. There will be no compromise regarding actions that threaten public safety, workers' lives, or fair market order."