Coupang Offers $1.2 Billion in Vouchers After Data Breach Sparks Outrage

South Korean e-commerce giant Coupang has announced a 1.69 trillion won (approximately $1.18 billion) compensation package for 33.7 million account holders affected by a significant data breach that occurred last month. The announcement follows a period of intense scrutiny from users and lawmakers regarding the security lapse and the subsequent response from the company.

As part of the compensation plan, Coupang will issue vouchers worth 50,000 won (roughly $37 USD) to each affected customer. This move comes after Coupang founder Kim Bom publicly apologized for the breach and committed to accelerating the process of providing redress to those impacted. However, Kim has opted not to appear at parliamentary hearings scheduled for Tuesday and Wednesday, citing pre-existing commitments.

The proposed compensation method has drawn considerable criticism, specifically regarding the form it takes. The vouchers are exclusively redeemable on Coupang’s own services and platforms, a restriction that has sparked concerns about the sincerity of the company’s apology and its commitment to genuinely addressing the harm caused by the data leak.

Choi Min-hee, a member of the ruling Democratic Party and chair of the National Assembly's Science, ICT, Broadcasting and Communication committee, voiced strong disapproval, stating that Coupang was essentially “bundling coupons for services no one uses.” She accused the company of attempting to capitalize on the crisis, turning a security failure into a potential business opportunity.

Consumer advocacy groups have echoed these sentiments. The Korea National Council of Consumer Organizations condemned the plan as disrespectful to consumers and a minimization of the data breach’s severity. They characterized it as a marketing tactic designed to stimulate further purchases rather than a genuine act of restitution for the compromised data.

Coupang has declined to respond to the growing public criticism surrounding its compensation plan, offering no further comment on the matter. Despite the company’s silence, South Korea’s parliament is proceeding with its planned two-day hearings on Coupang, beginning on Tuesday, to further investigate the data breach and the company’s handling of the situation.