[The Editors' Verdict]Telecom Companies Facing a Data Lifeline Crisis

The biggest reason telecommunications companies are gaining attention in the era of artificial intelligence (AI) is data. Utilizing the personal information of tens of millions of subscribers to mobile phones, internet, and TV not only aids companies' marketing but also supports their business strategies. The diverse data formed serves as a driving force to enhance AI performance. Given that AI grows by consuming data, the more information available for learning, the more accurate the results it can produce. This is also a solid foundation for mobile carriers to shift from their traditional network-centric business models toward becoming AI companies.

Data is also a tool for attracting talent to telecom companies. When Hwang Hyun-sik, CEO of LG Uplus, visited Silicon Valley last month to secure talent, he reportedly emphasized data. The most desired asset for professionals wanting to work in the AI field is data, which he highlighted as the biggest advantage telecom companies possess. Attendees of the event responded by saying, "Because LG Uplus is a telecommunications company, it has abundant data that can be utilized for AI technology," reflecting the same context.

However, the reality approaching soon is likely to differ significantly from these plans. In the AI era, the emphasis is shifting toward tightly restricting the use of personal information held by our telecom companies rather than utilizing it. In early 2021, five SK Telecom subscribers filed a lawsuit against the company demanding that their personal information not be pseudonymized, and the final verdict is expected as early as this month. If the Supreme Court decides not to proceed with further hearings, the ruling is likely to favor the plaintiffs since both the first and second trial courts ruled in their favor, which would be unfavorable for SK Telecom.

The reason telecom companies lost in the first and second trials lies in contradictory provisions within the same law. In 2020, the government enacted the three data-related laws (Personal Information Protection Act, Information and Communications Network Act, and Credit Information Act) to revitalize the data industry. These laws allow pseudonymization of personal information to expand its use for industries as well as research and other purposes. Article 28, Paragraph 2 of the Personal Information Protection Act states, "Personal information processors may process pseudonymized information without the consent of the data subject for statistical compilation, scientific research, and public interest record preservation."

However, Article 37, Paragraph 1 of the same law contains a completely different provision: "Individuals may request the suspension of processing of their personal information or withdraw consent for personal information processing." If a request is made not to convert information into de-identified data, telecom companies like SK Telecom have no choice but to comply. On one hand, the law opens the door to utilizing pseudonymized information, while on the other, it prevents the creation of de-identified personal information.

If the first and second trial results lead to a final ruling, the winning side may block the formation and use of subscribers' pseudonymized information. This would be a disaster for telecom companies. If data utilization is blocked, the personal information they currently hold would be worthless, and attempts to strengthen business by recruiting overseas AI talent would also be in vain. It is obvious that this would lead to weakened corporate competitiveness.

Science and technology experts believe the Supreme Court should not hastily dismiss the appeal. Unlike the first and second trials, the rapidly evolving nature of AI technology means there are many new issues for the court to consider. Experts advise the court not to focus solely on legal interpretations but to also consider global industry trends, and the court should take this advice into account.