Coupang Executives Grilled By Korean Lawmakers Over Data Breach

Irate lawmakers grilled executives from Coupang over South Korea's biggest-ever data breach at a testy hearing that underscored rising public anger with the country's dominant online retailer.

The company's billionaire founder Bom Kim did not attend the special session on Wednesday to answer questions about the breach, which compromised more than 30 million users' personal information, including names, phone numbers and delivery details. The former head of Coupang's Korean operations, Park Dae-jun, also failed to appear after resigning last week. Harold Rogers, Coupang Inc.'s chief administrative officer and newly appointed interim head of the Korean unit, attended the hearing alongside a range of lower-ranking Korean executives.

Coupang had so far "failed to provide responsible answers" about the breach, said lawmaker Choi Min-hee, who heads the parliamentary committee for science, ICT and broadcasting, in her opening remarks. She said Kim's absence "cannot be viewed as anything other than a failure to respect" both parliament and the country as a whole, warning that lawmakers planned to "establish accountability for this incident," including potentially passing new legislation to ensure the company's top executives could not evade their responsibilities.

Police conducted days of search-and-seizure operations at the company's offices last week, collecting logs and internal records to determine what happened and whether there were systematic failures in the company's security controls. Authorities are also examining whether the stolen data has been misused, amid reports of suspected phishing attempts.

The company has admitted it took months to detect the breach, prompting an unusually sharp rebuke by President Lee Jae Myung, who called the delayed discovery "astonishing." He has also urged the government to strengthen punitive measures so that companies face real consequences for negligence.

Coupang said it had "determined that a former employee may have obtained the name, phone number, delivery address, and email address associated with up to 33 million customer accounts, and certain order histories for a subset of the impacted accounts," according to a filing submitted on Monday to the US Securities and Exchange Commission.

The fiasco has the potential to reshape South Korea's online shopping landscape with rivals like Naver Corp. and Market Kurly moving to take advantage. Coupang has seen a sharp drop in daily active users, according to data from IGAWorks. After the company disclosed the breach on Nov. 29, its number of daily active users soared from 16.25 million to a record 17.98 million on Dec. 1, as many logged in to check their accounts and change passwords. But that figure slid to 15.94 million by Dec. 6, the data showed.

Source: Bloomberg Europe