SKT Rejects 300,000 Won Compensation Proposal for Data Breach—Cites Lack of Recognition for Proactive Measures

(Seoul=Yonhap Infomax) Young Sook Yoon – SK Telecom Co., South Korea's largest mobile carrier by subscribers (KRX:017670), has formally rejected a mediation proposal from the Personal Information Dispute Mediation Committee under the Personal Information Protection Commission, which recommended a compensation of 300,000 won ($220) per person for victims of a recent data breach.

With the mediation process now collapsed, the 3,998 applicants are expected to pursue individual lawsuits to seek damages.

According to industry sources on the 20th, SK Telecom officially notified the mediation committee in the afternoon that it would not accept the proposed settlement.

The company stated, "While we respect the committee's decision, we have decided not to accept the proposal as it does not sufficiently reflect the proactive compensation and recurrence prevention measures the company has taken since the incident."

SK Telecom added, "We will continue to implement measures to restore customer trust and prevent further damage."

Earlier, on the 4th of this month, the mediation committee recommended that SK Telecom pay 300,000 won ($220) each to 3,998 victims who applied for dispute mediation. The compensation amount factored in concerns over potential misuse of leaked information, inconvenience caused by USIM (Universal Subscriber Identity Module) card replacements, and psychological distress. If accepted, the mediation would have had the same legal effect as a court settlement. However, with SK Telecom's rejection, applicants will now need to seek compensation through civil litigation.

If either party rejects the proposal, the mediation process is terminated. As the applicants have already indicated their acceptance, the likelihood of lawsuits has increased.

Market observers note that SK Telecom's decision was likely influenced by concerns over the potentially massive financial burden. The 3,998 applicants represent just 0.02% of the estimated 23 million affected users. If the same compensation were applied to all victims, total payouts could reach approximately 6.9 trillion won ($5.1 billion).

With the collapse of the mediation, legal disputes over responsibility for the largest-ever data breach involving a South Korean telecom operator are expected to drag on.

ysyoon@yna.co.kr

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