The South Korean consumer agency, which is supported by the government, on Sunday asked SK Telecom Co to pay an amount of 100,000 won ($67) to each user as a compensation after the company faced a huge data breach earlier this year.
Complaint filed after breach affected 23 million users
The move from the Korean Consumer Agency followed the filing of a dispute mediation case with the agency in May by 58 consumers after the data breach had hit all the 23 million users of the company, which was reported by the Yonhap news agency.
In April, SK Telecom announced the leaking of HUGE amounts of universal subscriber identity module (USIM) data from its servers which made the company to offer free USIM replacements to all the users, and also triggered an investigation by the regulators concerned, as reported by IANS.
Record fine imposed by data protection authority
The PIPC (Personal Information Protection Commission) in August imposed a fine of 134.8 billion won on the telecommunications giant SK Telecom.
“Taking into account the joint investigation of the government and private sector that took place in July, as well as the verdict of the PIPC it was acknowledged that the hacking incident was the cause of consumer damage,” the agency stated.
SK Telecom is liable to pay individual consumers the compensation for the losses,” it further stated.
In accordance with the ruling, the Korea Consumer Agency mandated SK Telecom to give a 50,000 won reduction in the monthly subscription fees as well as 50,000 won in credits that can be used as cash equivalents, thus total compensation will be 100,000 won per user.
If SK Telecom agrees with the ruling within 15 days of the receipt of the notice, the agency will then take measures to reimburse the customers who did not take part in the mediation process.
2.3 trillion won payout may impact company profits
The total payout of around 2.3 trillion won ($1.5 billion) not only surpasses SK Telecom’s projected net profit for 2024 of 1.43 trillion won but also is equal to nearly 13 per cent of its projected sales of 17.94 trillion won in 2024.
“We will thoroughly analyze the decision and take a careful step,” SK Telecom mentioned in a statement right after the announcement.
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