[News Terms] The Intensifying Competition for 'Data Sovereignty'

Behind the recent incident where the Japanese government issued administrative guidance to Line Yahoo to reconsider its capital relationship with Naver lies the issue of 'Data Sovereignty.'

Data sovereignty started from the idea that just as a nation's sovereignty belongs to its people, the state and individuals who generate data should be guaranteed the authority to decide when, where, how, and for what purpose their data is used. With the spread of the internet and the growing importance of data, it is argued that ownership of data, which had been monopolized by a few companies, should be decided by the state and individuals.

If the collection and use of vast amounts of data are monopolized, serious social problems such as concentration of power or misuse of information can arise. In particular, there are concerns that if foreign companies own data sovereignty, as seen in the negative power phenomenon of 'Big Brother' caused by information monopolies, the data of their own citizens could be leaked, posing threats not only to the economy but also to national security.

In response, the European Union (EU) has established detailed guidelines on data through the General Data Protection Regulation (GDPR) since May 2018. The Digital Markets Act (DMA) and Digital Services Act (DSA), which have been enforced since this year to prevent the abuse of market dominance by big tech platforms such as Google, Meta, and Apple, also fundamentally aim to 'protect domestic companies.'

The United States has also strengthened protection of personal data through the California Consumer Privacy Act (CCPA). Additionally, U.S. President Joe Biden signed a bill last month to ban the popular Chinese social networking service (SNS) 'TikTok.'

China, citing national security reasons, has also ordered the removal of American Meta's social media apps WhatsApp and Threads from the Apple App Store within China.

Japan, which is pressuring Naver to sell its shares in Line Yahoo, is promoting the Smartphone Competition Promotion Act. This law targets Apple and Google, which dominate smartphone operating systems, and aims to restrict acts that interfere with other companies providing application (app) markets. In the case of Line, there are about 95 million users in Japan, making it almost a national messenger. Experts point out that there has been considerable resentment over the fact that half of this national messenger, which handles administrative tasks and tax payments for local governments, is owned by Korean capital.

However, it is unprecedented for the government to intervene and pressure a company's management rights. There is no legal provision under the Personal Information Protection Act that allows ordering changes in shareholding relationships. Our government stated, "There should be no discriminatory measures against Korean companies," and added, "We will closely monitor related developments and communicate with the Japanese side if support for Naver is necessary."