[Viewpoint] The Data Is with Naver

The sense of crisis over being an IT backward country triggered the Line-Yahoo incident. Japan did not have data sovereignty. Only four countries in the world?the United States, China, Israel, and Korea?have the capability to place data centers within their territory and manage the information produced on platforms themselves. Yet, the platform that Japan is dependent on, ‘Line,’ happens to be a Korean company’s service, which means that the stubbornness is a matter of life and death.

Naver manages Japanese people’s financial and shopping lives, content usage patterns, and even administrative processing information through Line. If you have a Japanese friend worried that “all the data about what Japanese people buy and who they transact with is in Korean hands, isn’t that unsettling?” you can tell them this: “This is not China.”

From a common-sense perspective, is there a possibility that the Korean government and Naver would join forces to politically exploit the data? What benefit would we gain from threatening Japan’s security or paralyzing its administrative and financial systems? If Japan were Korea’s main adversary, it might be a definite weapon, but realistically, that is unlikely to happen. Still, if “just in case” the instability of international relations causes fear and Japan demands negotiations, the more impatient side would be Japan. The data is with Naver.

While the structure is like this, the situation is moving in the opposite direction. Japanese media show little interest in this issue, whereas excited Koreans criticize the government and Naver alternately, saying “Line is about to be taken away from Japan.” It almost seems like they are urging Naver, “Don’t give up Japanese data. There’s a lot to do with it.” But again, this is not China.

This unclear situation about where to direct the criticism partly stems from Naver’s silence. Even though the government and media pressure Naver to “say how we should help,” their consistent silence is probably because “not revealing their position” is advantageous in negotiations. Therefore, we need to be more cautious in our statements to avoid a self-defeating ‘team kill’ among our own side.

Whether Naver sells its stake in Line-Yahoo to SoftBank, dismantles or splits the complex governance structure, or even threatens to sell shares to a Chinese company, I believe Naver is negotiating under conditions that best protect its company, employees, shareholders, and users’ rights. If, as we worry now, Naver were forced to sign a disadvantageous contract under unreasonable pressure from the Japanese government, they would break their silence before it’s too late.

Although I have consistently criticized Naver’s negative impact on the media market, I cannot be stingy in praising their entrepreneurial spirit for creating one of the few countries that have secured data sovereignty. I support Naver in holding the data and achieving the most favorable negotiation results possible. Ultimately, even if the data is fully transferred to a Japanese company and Naver withdraws, as long as it does not violate our data sovereignty and digital rights, it is fine if the negotiations conclude in the way most beneficial to Naver. Should private companies and governments unite to attack a specific country, or should reckless claims that go against international order and free market principles be made in Korea? Again, this is neither China nor Japan.