Time to enact our own economic security law

Instead, we should be thoroughly prepared for the brutal tech war.

Lee Chang-minThe author is a professor of Japanese studies at Hankuk University of Foreign Studies. The public must be exhausted over the flood of news and opinions about the Japanese government’s recent directive urging Naver to reduce its stake in Line, the most popular messenger app in Japan. Koreans must struggle to distinguish between what is a fact and what is an interpretation of the controversy because the internal situation of the company, which is not visible to outsiders, is complicated. Amidst the complex circumstances and calculations that are hard to make public, Naver seems to have somewhat fixed its position, and the government has decided to actively express its stance to the Tokyo. But clearly, this is not just a matter of a single company amid the changing times.

The situation has exposed the subtle differences between Seoul and Tokyo on how to deal with information leaks. Last November, Korean media reported that the leak of 500,000 cases of personal information triggered Japan’s recent decision and that it was not serious in comparison to data leaks of NTT and Facebook. However, trying to find similar fault with other companies over data leaks is far away from the essence of the case. It is not the first time that Line suffered a data leak. A particular breach in March 2021 at a Chinese contractor caused an enormous stir in Japanese society. It was because the Chinese government has access to the information of all companies in the country under the National Intelligence Law that was enacted in 2017.

Nevertheless, from Korea’s point of view, it is difficult to understand the Japanese Ministry of Internal Affairs and Communications’ decision to issue two administrative instructions and mention the need to push Naver to sell its stake in Line. To comprehend the Japanese government’s action, you need to approach the Line case in the context of economic security.

Based on the 2022 Economic Security Promotion Act, Japan has designated Line Yahoo, the operator of Line, as an infrastructure business in 2023. This designation requires companies to notify the government when they introduce facilities from abroad or outsource work to foreign countries. In short, it means that major companies linked to national security are subject to strict government oversight. The six-month grace period for Line Yahoo ended on May 16. The two extraordinary administrative directives could have been a warning ahead of the implementation of a new protocol.

The reason why Japan appeared to be “robbing” Line by citing economic security — just eight months after the leaders of Korea, Japan and the United States agreed on security cooperation in the Camp David summit — is that, ironically, Korea-Japan relations improved too rapidly. While the ties were at their worst under the Moon Jae-in administration, Tokyo enacted the Economic Security Promotion Act and went ahead with follow-up measures such as designating key industries for Japan. And yet, the bilateral ties were abruptly improved, exposing the contradictions in the rhetoric of security cooperation.

Behind the recent Line scandal was also SoftBank’s desire to “have its cake and eat it too.” As we all know, Naver and SoftBank played the game of chicken over the mobile payment app, but chose to cooperate in order to keep big U.S. and Chinese tech companies in check. But the synergy of their cooperation fell short of their expectations and the two companies’ overlapping business areas continued to clash except the messenger app. Then, the two companies began to have different dreams about AI as the ChatGPT craze hit. SoftBank abandoned its plan to invest in Naver’s AI project and decided to develop its own with an investment of 10 trillion yen ($64.2 billion). At that time, Tokyo announced that it will offer 42.1 billion yen to overhaul SoftBank’s supercomputers for AI development. Japan’s public and private sectors have joined forces in the global war over data sovereignty.

This is why the Korean government’s mission should not end with just protecting Naver. At a time when we should think about how to respond to the global tide, showing anger toward Tokyo’s unfair treatment of Naver, Korea’s tech giant, does not help. Korea must speed up the enactment of its own economic security law as soon as possible. It must also increase the number of its “digital allies” through a digital agreement with Japan, for instance. At the same time, the government must systemize support to prevent Korean companies from becoming a victim of data supremacy competition.

While a fierce international war is waged on the economic security front, we must refrain from emotional outbursts on “the cyber territorial invasion” or “the betrayal of Masayoshi Son.” Instead, we should be thoroughly prepared for the brutal tech war.

Translation by the Korea JoongAng Daily staff.