Tokyo traces Line security failure to Naver's governance

The Japanese government blamed Naver's governance structure regarding a unit outsourced to manage Line user data that was behind a massive personal information leak last year.

Japan’s chief cabinet secretary, Yoshimasa Hayashi, at a press briefing on Wednesday. [AFP/YONHAP]

The Japanese government has blamed Naver's governance structure regarding a unit of the portal giant outsourced to manage personal information data of the messenger app Line, mounting pressure on the Korean company.

“The administrative guidance called for strengthening safety management measures and a review of security guidance,” said Japan’s chief cabinet secretary, Yoshimasa Hayashi, at a press briefing on Wednesday. “There can be numerous ways to reconsider security governance. In any case, it is important that subcontractor is appropriately managed and function properly.”

Tokyo has been calling on Naver to trim its equity in Line Yahoo (LY), the operator behind Japan's most popular messaging app, Line, following a data breach incident in October that leaked some 510,000 items of personal information about users, business partners, employees, and other personnel through its subcontractor, Naver Cloud.

LY is 64.5 percent owned by A Holdings, a 50:50 joint venture between Naver and SoftBank.

Since this week, Seoul has been defending Naver against any discriminatory or unfair actions by Tokyo and has even implied that the Korean internet portal giant might not proceed with divestment.

Regarding Seoul’s position, Hayashi commented, “we have already communicated the Japanese government’s stance to the Korean government,” and added that it will continue to explain the issue “courteously” in the future.

Hayashi declined to comment when asked about Korea’s negative public sentiment toward the guidance.

LY’s C-suite executives including CEO Takeshi Idezawa and Chief Product Officer Shin Jung-ho assured Korean employees on Wednesday that they won’t be subject to discrimination regardless of the measures following the administrative guidance, to which LY has to respond by July 1.

The CEO emphasized the company's current top priority is to resolve the matter with the Japanese government. He also acknowledged responsibility for the security breach but asked employees to understand that the matter is being handled cautiously as Line is regarded as an important service by Tokyo.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]