Seoul has urged Tokyo not to discriminate against South Korean companies, the South Korean Ministry of Foreign Affairs said yesterday, after reports that technology giant Naver Corp is under pressure to sell its stake in Japan’s top messaging app.
South Korea’s Naver developed Line 13 years ago and now has more than 95 million users. It is also popular in Taiwan and Southeast Asia.
The app is operated in Japan by LY Corp, which is majority-owned by A Holdings, a joint venture between Naver and Japanese investment firm Softbank Group Corp.
Photo credit: REUTERS
Japanese reports last week said that Tokyo had demanded LY Corp review its relationship with Naver, with the Kyodo news agency saying Softbank was in talks to buy Naver’s LY Corp shares.
“We maintain a firm stance that there should be no discriminatory measures against South Korean companies,” the ministry said in a statement.
The South Korean government plans to discuss the matter with Naver “if necessary,” it said.
Line has been under scrutiny in Japan over a data leak involving more than 500,000 records last year, which prompted the Japanese Ministry of Internal Affairs and Communications to issue administrative guidance.
Line’s “strong dependence on Naver in terms of systems and network configuration” was among the causes of the leak, the Nikkei reported the ministry as saying.
“This relationship has also made it difficult for your company to demand appropriate safety measures from Naver and to implement proper management,” it said, referring to LY Corp.
One of South Korea’s biggest technology companies, Naver, and its myriad services — including Google-like maps, financial services similar to Apple Pay, and popular blogs and chat forums — are used daily by many South Koreans.
The unfolding situation is a “mismatch” for South Korean President Yoon Suk-yeol, who has been trying to improve ties with Japan in the face of military threats from North Korea, Sejong University business professor Kim Dae-jong said.
“Under global standards, countries do not demand companies forsake their shares — just like we don’t demand Facebook sell theirs over privacy concerns. Japan should follow such standards,” Kim said.
However, Seoul is not in position to block the deal as it does not involve national security, he said.
Naver declined to comment.
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