Coupang Announces $1.5 Billion Compensation for Data Breach Victims

Controversial Compensation Scheme

Coupang, South Korea's largest e-commerce platform, has unveiled a comprehensive compensation package totaling 1.69 trillion won ($1.5 billion) for the 33.7 million customers affected by the November data breach. The company will provide each impacted customer with a 50,000 won voucher redeemable exclusively on its platform.

Key Details of the Compensation Package

• Total compensation: 1.69 trillion won ($1.5 billion)
• Number of affected customers: 33.7 million
• Compensation per customer: 50,000 won voucher
• Voucher usage restriction: Limited to Coupang's platform and services

Public and Political Reaction

The compensation scheme has drawn significant criticism from both consumers and lawmakers. Critics argue that providing non-cash vouchers that can only be used within Coupang's ecosystem disadvantages consumers and benefits the company by driving business to its own underutilized services. Choi Min-hee, Chair of the National Assembly's Science, ICT, Broadcasting and Communications Committee, publicly criticized Coupang's approach, stating that the vouchers are akin to "coupons for rarely used services" and accused the company of trying to turn a crisis into a business opportunity.

Background and Timeline

The data breach incident occurred in November 2024, compromising sensitive information of millions of customers. The breach came to light recently, prompting immediate action from Coupang. On December 29, the company officially announced the compensation plan, just a day after founder Kim Bom issued a public apology and promised to expedite the compensation process. However, Kim chose not to attend the parliamentary hearing scheduled for December 30-31, citing other commitments.

Market and Consumer Impact

The incident highlights the growing concerns about data security in South Korea's rapidly expanding e-commerce sector. Coupang, known for its aggressive growth strategies and market dominance, now faces the challenge of restoring consumer trust while managing the financial implications of the massive compensation package.