South Korea stresses need for fair treatment for chat app operator Line Naver

SEOUL, South Korea (AP) — South Korea pledged Friday to protect its companies operating in other markets after Japanese regulators asked LY Corp., which runs the popular chat app Line, to reduce its dependence on Naver, the company’s Korean partner.

Friction over Naver’s 50% stake in LY, a venture with Japan’s SoftBank, surfaced after a major security breach on Naver’s cloud computing servers last year. The Japanese side asked LY to improve its governance and rely less on Naver after more than 300,000 records, including Line user information, were leaked.

Some Korean politicians have accused Japan of pressuring Naver to reduce its stake in LY, demanding that President Yoon Suk Yeol’s government take a tough stance toward Tokyo.

A senior official from Korea’s Technology Ministry spoke to reporters Friday after Naver confirmed it was discussing “all possibilities” with SoftBank, including selling its shares in LY Corp.

LY Chairman Takeshi Idezawa told reporters in Tokyo on Wednesday that Naver and SoftBank were discussing their stakes in the app operator under the assumption that SoftBank would take a majority stake.

Kang Dohyun, South Korea’s second vice minister of technology, told reporters in Seoul that the Korean government confirmed that the instructions issued to LY by Japan’s Ministry of Internal Affairs and Communications did not specifically require Naver reduce its stake in the company.

But he said Seoul regretted that the order was “perceived as pressure” for Naver to do so.

“I would like to reiterate that the government is firmly committed to ensuring that our companies, including Naver, do not suffer any disadvantage or unfair treatment in foreign business and investment,” Kang said. “We will react with severity and firmness to any discriminatory measures taken against our companies. »

Since taking office in 2022, Yoon has focused on improving ties with Tokyo that had deteriorated over long-standing grievances and strengthening mutual security cooperation with Japan and the United States facing North Korean nuclear threats.

Kang said the government would support any decision Naver makes regarding its stake in LY. If he decides to keep his role in the joint venture, he said the Technology Ministry would help him strengthen its cybersecurity.

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