Seoul vows action over Naver's Line, Yahoo dispute

Pedestrians walk in front of Tokyo Garden Terrace Kioicho, against the backdrop of a sign reading "Line Yahoo" in Tokyo on Thursday. (Yonhap)

President Yoon Suk Yeol's office vowed Monday to pull out all the stops to address the cybersecurity problems surrounding internet giant Naver, which jointly controls the Japanese firm operating messenger app Line and web portal Yahoo.

The remark from the presidential office came amid mounting pressure on Naver by Japanese authorities to divest its stake in the company that exercises control over leading internet services in Japan.

"The interests of South Korean citizens and companies (are a) priority and we will do anything we need to do. We have been consistent in that stance," said Sung Tae-yoon, director of national policy at the presidential office.

Sung added that the government will offer all available assistance to enhance measures to prevent LY's data breach.

LY, the operator of the messenger app Line, web portal Yahoo and additional mobile payment services, among others, is a subsidiary of A Holdings. A Holdings is a 50:50 joint venture of South Korea-based Naver and Japan-headquartered SoftBank.

The Ministry of Internal Affairs and Communications in Japan has issued administrative orders twice aimed at strengthening LY's cybersecurity measures.

In the latest order in April, the Japanese government called on SoftBank to take full ownership of A Holdings.

On Friday, Naver said in a statement that it was open to all options, including a stake divestment to SoftBank.

Sung Tae-yoon, director of national policy at the presidential office, speaks during a press conference in Seoul on Monday. (Yonhap)

The presidential office did not directly comment on Japan's latest administrative order in April, which highlighted an organizational structure where Naver divests all of its shares to SoftBank.

Sung hinted that the government's support could be limited to strengthening measures to protect Line Yahoo's private data. He said the government support can be extended "except for Naver's change of capital structure."

A source from the presidential office said on condition of anonymity that it was expecting "Naver's sincere and concrete stance" to allow the government to help Naver regarding LY's cybersecurity issue.

"If Naver intends to maintain its control over Line (and) Yahoo and keep its business intact, we will pull out all stops to strengthen its cybersecurity measures," Sung said.

On the same day, a minor opposition party urged Yoon to directly speak to his Japanese counterpart Fumio Kishida and send him a warning that Seoul would take countermeasures while accusing Tokyo of attempting to take Naver's shares in Line.

Cho Kuk, lawmaker-elect and founder of Rebuilding Korea Party, delivers a statement in front of Dokdo, an islet that has long been the subject of a territorial dispute between South Korea and Japan, on Monday. (Rebuilding Korea Party)

Cho Kuk, a lawmaker-elect of the fledgling Rebuilding Korea Party, said in a statement that Line's market presence, technology and data set are about to be handed over to Japan because the Tokyo government is trying to "steal LY's control from Naver."

Sung sought bipartisan support, calling on the opposition parties to stop stirring anti-Japan sentiment, saying these actions are "inevitably detrimental to our national interest."

By Son Ji-hyoung(consnow@heraldcorp.com)