Digital Sovereignty: Data Diplomacy Between Nations
Digital Sovereignty: Data Diplomacy Between Nations
  • Reporter Kim Yu-jin
  • 승인 2024.06.12 15:10
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▲ A graphic of the split between Naver and Yahoo / The Chosun Ilbo
▲ A graphic of the split between Naver and Yahoo / The Chosun Ilbo

  As numerous online platforms emerge, they have been recognized as national assets. Online platforms are deeply rooted within our daily lives, and thus have a great influence on the economy, politics, and most importantly, information. It is fair to say that the 21st century revolves around information, and these platforms are no longer a matter restricted to tech companies.

  This is seen in the case of LINE Yahoo. Last November, Naver’s server containing customer information of LINE, a messenger platform, was hacked. This incident resulted in the leak of 510 thousand account’s personal information and the Japanese government requested for Softbank to increase the share of LINE. 

  LINE Yahoo’s current largest shareholder is A Holdings by 64.5%. Naver and Softbank agreed on joint management when merging LINE and Yahoo Japan, and the two companies made a joint holding company, “A Holdings.” A Holdings’ share was divided between Naver and Softbank exactly 50% share each. LINE Yahoo has grown steadily since the merger and has been making large profits and expanding its business globally. The reason behind Softbank’s sudden request for Naver’s sale of shares can be found in the Japanese government’s repeated request for adjustment of LINE Yahoo’s share structure. After the information leak incident, the Japanese government requested the adjustment and a report of how LINE Yahoo plans to strengthen its security. The Japanese government found the cause of the incident to be the excessive dependence on Naver, thus the request.

  As a result, LINE Yahoo has excluded Korean directors from LINE Yahoo’s board of directors and announced the end of projects entrusted to Naver. In May, Softbank strongly expressed its intention to become the largest shareholder and announced that they are discussing share adjustment with Naver. In reaction to the Japanese government’s intervention in LINE, the Korean government announced that Naver would not sell its share to Softbank and that Korea would assist in the strengthening of cyber security by other means. The Korean government confirmed that the sale of Naver’s share will not be included in the report to the Japanese government and emphasized that this action should not lead to the Japanese government’s discrimination against Korean companies.

  Government participation in the matter of private companies seems unusual. But what this situation between Naver and Softbank clearly shows us is that these online platforms are no longer a matter limited to private companies. These platforms deal with information, and in a world where information is the most valuable asset, countries try to keep their nation’s information inside and avoid the outflow of information as much as possible. With worldwide competition between countries on the development of AI technology, the importance of data could not be expressed enough. LINE has 96 million Japanese users and over 200 million users in the Asia market. Considering that the number of Japanese users takes up about 80% of Japan’s whole population, the Japanese government’s actions can be interpreted in line with this worldwide trend of securing data.

  Governments are not the only ones recognizing the importance of data. People also show that they consider information and online platforms’ technology as national assets. In the case of LINE Yahoo, Koreans criticized the Korean government for its tepid attitude towards the Japanese government’s action towards Naver, pressuring for actions of the Korean government. In addition to this, the download number of LINE applications increased after the LINE Yahoo situation, showing that Koreans are against the idea of a Japanese company being the larger shareholder. 

  This trend of securing data and recognizing data as a national asset can be seen globally. Recently in March, the U.S. held a congressional hearing of the CEO of online shortform platform TikTok. Claims of TikTok threatening the security of the U.S. have persisted for several years, since the founder company of TikTok, ByteDance, is located in China. The EU is also pressuring Big Tech companies by passing the Digital Markets Act (DMA), to strengthen security measures of online platforms and fostering the environment for fair competition and convenience of users.

  The world is undergoing a silent war of securing data and technology, and LINE Yahoo is just the beginning. Laws concerning these matters must be made, and we must decide on our attitude towards these situations. There is a new war upon us, and information and technology are its weapons.