Korea Business News Agency - NSP NEWS AGENCY.

(Seoul=NSP NEWS AGENCY) = Japan’s blatant LINE extortion is causing a stir in South Korea.

Launched in 2011, LINE is now considered the national messenger in Japan, with 96 million monthly active users. NAVER and SoftBank each invested 50 per cent to form A Holdings, which in turn controls LINE Yahoo, which operates the LINE app in Japan.

When LINE’s personal information was leaked through Naver Cloud, the Japanese government took advantage of the opportunity and ordered a de facto takeover of the company through a shareholding arrangement.

In addition to the departure of a Korean board member, LINE Yahoo also announced that its board of directors is now comprised entirely of Japanese, and that it intends to end its outsourcing relationship with Naver. Furthermore, Japan’s SoftBank has also formalized its intention to buy part of NAVER’s stake in A Holdings, and has stated that it will finalize the deal by July this year.

In the midst of this process, domestic politicians and IT civil society organizations have been calling for an active response to Japan’s blatant technology invasion. In particular, civic groups are protesting that Japan, which is different on the outside and different on the inside, has struck again.

“While we are appalled by the intervention of a friendly government in a business relationship between companies, we are outraged by SoftBank’s attempts to take control of the company with the government’s backing,” said IT Citizens for Fairness and Justice. “The Japanese government and SoftBank should be aware that the current situation could cause a huge rift in the otherwise friendly relationship between Japan and South Korea.”

Ahn Cheol-soo called for “a strong response to the situation from the perspective of technological sovereignty”, while Yoo Seung-min expressed “fundamental doubts about the relationship between South Korea and Japan, seeing the Japanese government trying to take away Naver’s stake in LINE through de facto coercive measures of administrative guidance”.

In an official statement on Tuesday, NAVER said, “We are continuously considering and reviewing the strategic use of our resources and investments to enhance the company’s future growth potential and maximize shareholder value,” adding, “In this matter, we are open to all possibilities, including the sale of our stake, and are in sincere discussions with SoftBank to create the best outcome for the company.” However, the company cautioned that it could not disclose further details until a conclusion is reached.

By Soon-ki Lee(s8789@nspna.com) and Bok-hyun Lee(bhlee2016@nspna.com)

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