Google faces scrutiny by Korean regulators

Lee Min-hyung – The Korea Times

Search engine giant Google is facing increasing scrutiny by Korean regulators over the latest series of heated controversies surrounding its alleged involvement in tax evasion and abuse of its market dominance.

The controversies include allegations that the Android operating system creator has breached the nation’s antitrust regulations by abusing its dominant position through pressing Android device manufacturers to install non-removable apps. Google is also clashing with Seoul over its requests to take the nation’s map data overseas.

But the government has yet to take any hard-line stances by imposing strict regulatory measures on the company, and so far remained “ambiguous” in its posture.

In particular, the government only said it will continue to monitor Google’s possible monopolistic schemes surrounding the pre-installed apps.

This is in contrast to the European Commission’s recent decisions over the similar issue. The EC claimed that Google imposed restrictions on some Android device manufacturers, which the regulator says is a clear breach of antitrust rules set by the EU. Google is facing a fine of some $3.4 billion from the EC.

Even though the issue is sweeping the world, the Korean regulators ― including the Ministry of Science, ICT and Future Planning (MSIP), the Korea Communications Commission (KCC) and the Fair Trade Commission (FTC) ― are still keeping a low profile.

In 2011, the FTC previously acquitted Google of similar charges filed by its Korean counterparts ― including Naver and Daum ― citing Google’s weak market share in Korea.

Amid the growing controversy, the FTC launched a probe into Google Korea last week. But it remains to be seen whether the regulator hands down tough sanctions on the company, given its previous posture.

Google was also mired in a controversy last month when it officially requested the National Geographic Information Institute (NGII) to approve its plan to host the nation’s geographic data overseas.

The plan, however, is met with fierce oppositions from relevant government bodies. In particular, the Ministry of National Defense called for other relevant government agencies to approve the Google request only when it blurs map data for some politically and militarily sensitive areas.

Regarding the issue, Naver, the nation’s top portal operator, called for the government to get tougher to deal with the issue.

“We believe financially healthy companies, such as Google, can put an end to this kind of controversy under the local legal system,” Lee Hae-jin, chairman of Naver, said in a recent press conference.

He also expressed displeasure over Google’s absence of data centers here.

“No one knows how much money Google or Facebook makes in Korea, even though any companies here should unveil their sales figures and pay tax accordingly,” he said. “If Naver had run business in the same way, the government and media would not have forgiven our acts. We don’t understand why the government leaves the matter as it is.”

Despite the firm’s tax-dodging allegations, the Korean government has yet to launch any in-depth probes into the local subsidiary of the U.S.-based search giant.

This is a stark contrast to decisions by French authorities. French finance minister Michel Sapin previously said no tax deals with Google. In May, tax investigators there raided into Google’s French headquarters to seek more than $1.12 billion over suspected tax evasion of the company.