Gov't launches investigation into AliExpress, Temu data practices

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Gov't launches investigation into AliExpress, Temu data practices

Ko Hak-soo, chair of the Personal Information Protection Commision, speaks during a meeting with reporters in Washington on Wednesday. [YONHAP]

Ko Hak-soo, chair of the Personal Information Protection Commision, speaks during a meeting with reporters in Washington on Wednesday. [YONHAP]

 
The Korean government has launched an investigation into the data collection and utilization practices of Chinese e-commerce giants AliExpress and Temu amid growing concerns about data security in the country.
 
“There are concerns on the level of privacy regulations in China and whether data protections are adequately practiced,” Ko Hak-soo, chair of the Personal Information Protection Commission, said in a meeting with Korean reporters in Washington during his visit to the U.S. for an international conference.
 

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The investigation involves sending detailed questionnaires to Chinese companies, Ko said. The Commission aims to scrutinize their data processing policies and consent mechanisms as well as determine whether collected data are managed within China or funneled to other countries, he added.
 
The Personal Information Protection Commission, which is under the authority of the prime minister's office, imposes fines and corrective measures for any violations of personal information protection laws — including those by foreign companies servicing Korean users. It slapped Google and Meta with a 100 billion won ($74 million) penalty in September 2022 for allegedly utilizing users' personal information for online advertising without consent. Legal proceedings are currently under way.
 
The inquiry comes as Chinese e-commerce platforms continue to gain traction in the Korean market. Concerns loom over potential breaches of Korea's personal information protection laws, raising fears that users' data might be compromised and exploited for illicit activities such as voice phishing.
An AliExpress advertisement featuring actor Don Lee [ALIEXPRESS KOREA]

An AliExpress advertisement featuring actor Don Lee [ALIEXPRESS KOREA]

 
AliExpress had 8.88 million monthly active users as of March, while Temu followed closely with 8.3 million users — placing the two second and third, respectively, among the most-used shopping apps in Korea, according to data from the app and retail analysis service WiseappㆍRetailㆍGoods.
 
Both platforms are expanding their presence in Korea, employing not only ultralow pricing but also intensive marketing tactics, recently including indirect advertising through popular TV shows. 
 
Once installing the Temu mobile app, customers are offered discount coupons through a roulette game. [SCREEN CAPTURE]

Once installing the Temu mobile app, customers are offered discount coupons through a roulette game. [SCREEN CAPTURE]

AliExpress entered the Korean market in 2018 and established a dedicated customer center for Korea in November 2022. It widely advertised a delivery time of three to five days, enlisted popular actor Don Lee as brand ambassador and broadcast ads across TV, YouTube and subway stations.
 
Temu, which debuted in Korea last July, has been steadily growing its user base through events, including cash coupon offerings. The platform recently collaborated with the SBS TV program “My Little Old Boy.” A cast member used the Temu app on their phone during a segment of the show that aired on March 31.

BY SEO JI-EUN [[email protected]]
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