KT Faces Potential 190 Billion Won Fine Over Hacking Incident

The Personal Information Protection Commission (PIPC) is set to deliberate on penalties for KT's data breach and hacking incident on July 29. Industry insiders anticipate fines could range from 80 billion to 190 billion won, a figure influenced by previous penalties levied against SK Telecom and Coupang.

KT faces scrutiny following a hacking incident that led to unauthorized small-sum payments and the subsequent departure of 270,000 subscribers after the company waived fees. The PIPC initiated its investigation into KT's alleged data leaks in September of the previous year, concluding its probe in May. The commission has since reviewed KT's official statements and submitted evidence.

The potential fine is calculated based on up to 3% of the revenue related to the violation. For KT's wireless business, with an average annual revenue of approximately 6.5 trillion won between 2022 and 2024, this could theoretically reach up to 190 billion won. However, the final amount will consider the violation's severity, the extent of damages, and the company's response.

Previous cases offer a benchmark: SK Telecom faced a fine equivalent to about 1% of its mobile communication revenue, suggesting a potential fine around 80 billion won for KT. Coupang was recently fined over 624.6 billion won, roughly 2% of its e-commerce revenue. Applying a similar percentage to KT could result in a fine of around 130 billion won, or approximately 90 billion won if considering only the data breach and safety measure violations.

The investigation confirmed 368 victims of small-sum payment fraud totaling 243.19 million won and identified 22,227 subscribers whose personal information may have been leaked. The Ministry of Science and ICT's joint investigation team found KT negligent in managing its femtocells and violating the Information and Communication Network Act, posing risks to all KT users, not just those affected by payment fraud. The total reported damages stand at 170 million won across 278 cases, according to KT's internal assessment.