This undated file photo provided by SK Telecom Co. shows the company’s headquarters in downtown Seoul. (Yonhap)
SEOUL, Nov. 20 (Korea Bizwire) — SK Telecom has decided not to accept a government-recommended settlement that would require the company to pay 300,000 won (about US$220) to each victim of a major personal-data breach, a move that could expose the telecom giant to prolonged civil litigation.
According to industry officials on Nov. 20, the company completed its legal review after receiving the Personal Information Dispute Mediation Committee’s ruling on Nov. 5 and plans to formally submit its rejection before the deadline. If either party refuses the proposal, the mediation collapses and the case is closed, leaving victims to pursue damages through the courts.
The committee’s recommendation would have compensated the 3,998 applicants — just 0.02 percent of the estimated 23 million affected users — and required SK Telecom to strengthen internal management plans, improve cybersecurity measures, and upgrade the safety of its data-processing systems.
But SK Telecom argued that accepting the settlement could set a precedent for identical claims from all affected customers, potentially driving total compensation costs to nearly 7 trillion won. The company has already incurred more than 1 trillion won in expenses related to the breach.
SK Telecom, which had suffered the theft of its subscribers’ USIM information, launched a free USIM replacement service. In a store located in Seoul, a notice was posted stating that USIM stock had run out. (Image courtesy of Yonhap)
The mediation panel factored in concerns over potential misuse of leaked data, risks of mobile phone cloning, and the confusion caused by forced SIM card replacements when calculating the damages.
This is not the first time the company has resisted a settlement. SK Telecom previously declined a separate order by the Korea Communications Commission’s dispute panel to waive contract cancellation fees and reduce penalties for bundled services.
Meanwhile, roughly 9,000 data-breach victims have filed an independent lawsuit seeking 500,000 won per person in damages, with the first hearing scheduled for January. Additional civil suits are expected as fallout from one of Korea’s largest-ever telecom breaches continues to grow.
Kevin Lee (kevinlee@koreabizwire.com)
