[2022 National Audit] Tax Avoidance Controversy and Policy 'Ignorance' Consistency... Ruling and Opposition Parties Criticize Google and Netflix

"Do You Take the People of the Republic of Korea for Fools?" Interrogation
Strong Criticism of the Witness's Unconcerned Attitude

[Asia Economy Reporter Lim Hye-seon] On the 21st, during the comprehensive audit of the Korea Communications Commission held by the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee, allegations arose that Google Korea attempted tax evasion. Additionally, both ruling and opposition parties strongly reprimanded the consistent 'feigning ignorance' attitude of witnesses Kim Kyung-hoon, President of Google Korea, and Jung Gyo-hwa, Executive Director of Netflix Services Korea, who appeared as witnesses.

Democratic Party lawmaker Kim Young-joo criticized, "In 2020, Executive Director Lim Jae-hyun of Google Korea testified at the National Assembly's Political Affairs Committee audit that Google Korea's annual sales were 1.4 trillion won, but President Kim Kyung-hoon explains it as 290 billion won," asking, "Are you committing perjury?" In response, President Kim answered, "Google Play sales are a business conducted in Singapore, so they are not domestic sales." Then, lawmaker Kim Young-joo pressed, "This is tax evasion," and asked, "Do you see the people of the Republic of Korea as fools?"

Park Sung-joong, the senior member of the People Power Party, also questioned, "Even conservatively estimating domestic sales, it would be between 6 trillion and 8 trillion won," adding, "Based on a 30% commission rate, over 2 trillion won is taken from Korea annually, but paying only a few billion won in taxes?is that reasonable?"

On this day, both ruling and opposition parties strongly criticized the witnesses' insincere attitude. Lawmaker Park Chan-dae said, "This is an insult to the National Assembly," and scolded, "What does President Kim know?" People Power Party lawmaker Heo Eun-ah also pointed out, "He seems more like the head of Google Advertising Korea than the president of Google Korea."

Chairman Jung Cheong-rae also criticized, saying, "He keeps repeating only 'I understand the intent,'" and added, "He is making a cunning provocation against the National Assembly." He continued, "Ignoring the National Assembly is not only about shouting and displaying bad behavior." When asked about the number of Google Korea employees and the number of Korean YouTube subscribers, President Kim Kyung-hoon replied, "I understand that Google Korea has just over 600 employees, but I do not know the number of Korean YouTube subscribers," adding, "I am providing the most accurate information I know."

He further criticized, "A president who comes to the audit hearing does not even know the number of Korean YouTube subscribers. What exactly does he know? Is this Google North Korea? This is too much. I have never seen such a witness." Chairman Jung Cheong-rae announced plans to file charges against President Kim Kyung-hoon and Executive Director Jung Gyo-hwa. After the national audit ends, they will review points of perjury in their responses and decide after consultation between ruling and opposition senior members.

Meanwhile, it was revealed that Open Net, a corporation collecting signatures opposing mandatory network usage fees legislation, was established with sponsorship from Google Korea. In 2020, Google Korea donated 220 million won (51.4% of the total) to Open Net, accounting for more than half of Open Net's total donations that year. Democratic Party lawmaker Byun Jae-il asked President Kim Kyung-hoon, "Google Korea was the only sponsor with 30 million won at the founding in 2013," and questioned, "Can we then say that Google Korea created Open Net?" He also pointed out, "Google Korea said the company donates to various non-profit organizations, but the donation amount in 2020 was only 40 million won." President Kim Kyung-hoon explained, "It seems that Open Net has been a long-term recipient of our donations," adding, "The donations Google Korea makes to external organizations are not subject to my approval."