Coupang Announces KRW 600 Billion Record Penalty as "Subject to Judicial Review"... Discloses Administrative Lawsuit

Coupang Inc. Discloses Personal Information Commission’s Penalty

Defines It as "Subject to Judicial Review"... Plans to File Administrative Lawsuit

Penalty to Be Reflected in Second Quarter Results in Advance

Industry Closely Monitors Ripple Effects of Coupang’s Penalty

Coupang Inc., the parent company of Coupang, has officially announced that it will pursue legal action, defining the record-high penalty imposed by the Personal Information Protection Commission as "subject to judicial review."

On June 11 (local time), Coupang Inc., which is listed on the New York Stock Exchange, stated in a current report filed with the U.S. Securities and Exchange Commission (SEC) that "the regulatory decision and penalty imposed by the Personal Information Protection Commission (PIPC) are subject to judicial review," and that "the company plans to actively seek remedies by filing a petition with the Seoul Administrative Court." As a New York-listed company, Coupang Inc. is required to file a report within four business days in the event of a significant issue. By disclosing the penalty as soon as it was announced, the company demonstrated its intention to respond swiftly.

Coupang Headquarters in Seoul. Photo by Yonhap News.

Previously, on June 10, the Personal Information Protection Commission held a general meeting at the Seoul Government Complex, and announced the previous day that it would impose a total penalty of KRW 624.6 billion on Coupang for leaking the personal information of 37.5 million people and for collecting members' online activity records without legal grounds. A penalty of approximately KRW 423.6 billion was imposed for the large-scale personal data leak, and in addition, Coupang was fined KRW 201.1 billion for violations involving the collection and storage of online activity records of more than 10 million members without consent, in connection with third-party advertising programs.

Furthermore, Coupang's logistics subsidiary, Coupang Fulfillment Services (CFS), was found to have collected the personal information of reporters entering police stations without legal grounds and registered them on an employment restriction list, resulting in a penalty of KRW 220 million. Including fines, the total amount imposed on Coupang by the Personal Information Protection Commission amounts to approximately KRW 624.9 billion, the largest ever. Even when limited to penalties for personal data breaches, this is the highest amount compared to similar cases domestically and internationally.

Coupang Inc. explained, "The Personal Information Protection Commission is expected to issue a written decision at a later date," adding, "The final penalty amount, the investigation results, and the corrective actions may differ from what was announced by the commission." The company also noted, "The penalty to be paid to the Personal Information Protection Commission is not automatically deferred even if an appeal is filed, and it is not tax deductible," and added, "The penalty, estimated at approximately USD 410 million, will be reflected as operating and administrative expenses in the results for the second quarter of 2026."

The penalty and fines imposed on Coupang amount to 92% of Coupang Inc.'s annual operating profit for the previous year (KRW 679 billion), meaning the entire amount will be recognized as a loss in a single quarter. In August 2024, Coupang was also fined KRW 162.8 billion by the Fair Trade Commission on charges such as manipulating algorithms to favor its own private label (PB) products and having employees write product reviews. Coupang recognized this as a loss in the second quarter of that year and filed an administrative lawsuit. If the court accepts the petition, the company may recover the amount.

The e-commerce and related industries are closely monitoring the unprecedented penalty imposed on Coupang, not only for the personal information leak but also for the unauthorized collection and storage of members' activity records on other websites and applications. An industry insider said, "The fact that the Fair Trade Commission and the Personal Information Protection Commission have consecutively imposed hefty penalties on the top company in the industry is seen as a warning not only to Coupang but also to its competitors," adding, "With personal data breaches recurring on online platforms and frequent collection of user information for marketing purposes, this is likely to prompt businesses to feel a sense of crisis and review their practices."

This content was produced with the assistance of AI translation services.