South Korea to raise data privacy fines to 10% of sales, use proceeds for victim relief

Personal Information Protection Commission Chairwoman Song Gyeong-hui [Personal Information Protection Commission]

South Korea will begin imposing "punitive fines" of up to 10 percent of a company's sales for personal data privacy violations starting in September.

Collected fines will feed into an integrated fund dedicated to compensating and restoring the rights of affected citizens. Authorities are also considering reducing fines for companies that make meaningful investments in data breach prevention.

The Personal Information Protection Commission presented these plans Thursday as part of its second-half work agenda for 2026, at Cheong Wa Dae's Yeongbingwan reception hall.

The punitive fine system, set to launch in September, allows regulators to impose penalties of up to 10 percent of a company's sales for serious or repeated violations of data protection law — a significant increase from the existing ceiling of 3 percent.

The commission also plans to strengthen its investigative powers, including compulsory compliance fees for non-cooperation and evidence preservation orders. A dedicated task force will handle major cases — such as breaches involving more than 1 million records — with intensive investigation and swift disposition, while a fast-track procedure will be introduced for smaller cases.

An integrated fund will be established so that fine revenues can be directed toward compensating victims and restoring their rights. The measure responds to criticism that people whose personal data has been leaked receive inadequate practical compensation.

The commission will also codify corporate liability for damages in the event of a breach and strengthen the statutory damages system to require companies to bear the overall burden of proving their responsibility for a leak.

[Personal Information Protection Commission]

To expand the prevention framework, the commission will reduce fines for companies that invest in data protection beyond what the law requires. Factors such as rapid detection and reporting, incident response, efforts to contain the spread of damage, and measures to prevent recurrence will be taken into account when determining fine amounts.

With data breaches at public institutions showing no sign of abating, the commission plans to expand mandatory obligations for such bodies and increase their dedicated data protection staffing and budgets.

Specifically, the commission will require designated chief privacy officers to register for 387 intensively managed public systems, and will mandate vulnerability assessments and simulated hacking exercises at least once a year. Starting with 81 major systems — including the Government24 and National Sinmungo portals — the Information Security Management System certification (ISMS-P) will be made mandatory in phases.

The commission also plans to introduce a special exemption allowing the use of original personal data in developing AI for public-interest or social purposes, provided appropriate safety measures are in place. The move responds to persistent demand from the field for access to raw data to build higher-performing AI models.

In addition, the commission intends to consolidate various innovation-support mechanisms — including preliminary adequacy reviews and regulatory sandboxes — into a unified support framework tentatively called the "AX Safe Support System."

As part of a broader push for region-led growth, the commission will also run pilot programs at the local level to allow pseudonymized data to be reused across a wider range of research projects, with plans to institutionalize the practice in stages.

"Last year's large-scale data breach prompted us to strengthen the effectiveness of sanctions while shifting our personal data protection framework toward a prevention-first approach," commission Chairwoman Song Gyeong-hui said. "In the second half of the year, we will reinforce institutional support so that prevention investment and protection efforts take root on the ground, and we will push ahead with safe data utilization and innovation at pace — delivering changes and results that people can actually feel."

sjpark@heraldcorp.com