The Korea Communications Commission said Thursday that Uber doesn't comply with requirements to report how it protects user location data. Violators can be sentenced to prison up to three years or get fined a maximum 30 million won (about US$ 28,000).
The telecom regulator said it will file a formal complaint requesting that federal prosecutors take Uber to criminal court.
Uber didn't immediately respond to a request for comment.
This latest legal problem for the San Francisco ride-sharing company comes after the country filed a criminal charge against Uber CEO Travis Kalanick in December for allegedly flouting local transportation laws. If found guilty, he could face up to two years in prison, although he was never detained by the authorities.
In addition, the Seoul city government vowed last year to ban the Uber service, saying that because it is operated by unlicensed drivers using private or rental cars, it threatens the safety and security of the customers. The city even offered a reward of 1 million won to those who report illegal activities by Uber.
In an official response, the company pleaded to the Seoul city mayor to reconsider the action, calling it a "lose-lose" decision for the citizens.
The backlash is not limited to Seoul. Uber is already facing legal challenges in many European cities and some states in the U.S. Most recently, the mobile car-summoning service was suspended in Delhi after a female passenger was allegedly raped by a Uber driver.
Despite the controversies, Uber raised $1.4 billion last year to become a US$40 billion-valued startup running its services in 270 cities around the world.
In the local taxi market, Uber is competing with other operators that offer similar services. South Korea's largest messenger app provider, Daum Kakao, is launching its own cab-booking service in partnership with licensed taxi drivers. Uber, too, introduced the Uber Taxi service earlier this month working with an existing cap operator in Incheon, the second-largest city in Korea.