South Korea Issues Detailed Guidelines for Foreign Companies on Data Protection Compliance

The Personal Information Protection Commission (PIPC) of South Korea released comprehensive guidelines titled "Guidelines on Applying the Personal Information Protection Act to Foreign Business Operators." These guidelines aim to help foreign companies navigate and comply with South Korea's Personal Information Protection Act (PIPA), particularly in light of major amendments made to the law in 2023.

Key aspects of the guidelines include criteria for PIPA applicability. The guidelines outline three scenarios where foreign businesses may be subject to PIPA: when providing goods or services to Korean data subjects, when engaging in personal data processing activities that affect Korean data subjects, and when maintaining a place of business within Korean territory. The PIPC provides specific factors for assessment, such as language used, currency accepted, and service delivery methods to help businesses determine if they fall under PIPA's jurisdiction.

The PIPC provides specific factors for assessment, such as language used, currency accepted, and service delivery methods:

2. Clarification of Legal Requirements: The guidelines highlight important obligations introduced in the 2023 PIPA amendment, including:
   • Obtaining consent from legal guardians for children under 14
   • Procedures for cross-border data transfers
   • Establishing and disclosing privacy policies
   • Prompt notification of data breaches (within 72 hours)
   • Upholding data subjects' rights (access, modification, deletion, etc.)
3. Data Breach Reporting: Foreign businesses are required to notify the PIPC within 72 hours of becoming aware of a data breach involving Korean data subjects. They must also inform affected individuals and provide preliminary details to the authority.
4. Cross-border Data Processing: The guidelines emphasize the need for clear disclosure of overseas data processing activities, including the country and entity involved. They also stress the importance of distinguishing between "provision" and "consignment" of data to third parties.
5. Privacy Policy Transparency: Foreign businesses are encouraged to enhance the readability of their privacy policies for Korean data subjects, ensuring all PIPA-required elements are included.
6. Domestic Agent Designation: The guide advises foreign businesses required to designate a "domestic agent" to consider appointing their Korean corporation for this role, if one exists.

PIPC Chairman stated, "In today's digital landscape, online services are reaching users in all corners of the world almost instantly. Our data protection law aims to ensure that domestic and foreign companies play by the same rules. Through this new guideline, we anticipate that foreign businesses will gain a deeper understanding of the legal requirements of the PIPA and enhance their compliance, ultimately contributing to the protection of data privacy of Korean data subjects."

The guidelines were developed based on consultations with relevant experts and feedback from an on-site meeting with foreign businesses active in Korea held in January 2024. This development underscores South Korea's commitment to balancing international business facilitation with robust data protection for its citizens. As global digital trade expands, the PIPC's guidelines could serve as a model for other national data protection authorities seeking to navigate the complex intersection of international commerce and data privacy.

Foreign companies considering entry into or expansion within the South Korean market are strongly advised to review these guidelines as part of their compliance strategy. The PIPC's proactive approach in providing clarity and guidance signals a cooperative stance between regulators and international businesses in the realm of data protection, potentially easing market entry while maintaining high standards of personal information protection.

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