Naver and Google continue to exchange criticism following parliamentary audit

CEO Han Seong-sook accused the company of failing to pay taxes or hire local workers

Naver has renewed its criticism of Google after a parliamentary audit, effectively trying to dispute Google’s rebuttal. In a lengthy document titled “Naver’s Official Questions and Proposals in Response to Google’s Official Position” that was released on Nov. 9, Naver CEO Han Seong-sook criticized its internet rival in seven areas: employment, taxes, traffic costs, search exploitation, algorithms, financial influence and political influence.

During the National Assembly’s audit of government affairs on Oct. 31, Naver’s founder and Global Investment Officer (GIO) Lee Hae-jin said that Google “is neither paying taxes nor hiring people” in South Korea and that “you would find a lot of those problems at Google, too,” referring to fake clicks and manipulation of search terms. Google countered by releasing a statement on Nov. 2 in which it said, “Google is paying taxes in South Korea, and hundreds of employees are working for it. The results of Google searches are not influenced by financial or political pressure.”

“The response that Google keeps making is that it’s paying taxes, but it needs to specifically disclose its sales and operating profits in South Korea and the corresponding tax payments,” Han said in his response to Google’s rebuttal. “When Google Korea was established in 2006, it announced a plan for investing and hiring R&D staff and received US$1.2 million in government subsidies over two years, but questions continue to be raised about whether it actually put this plan into practice.”

“In 2016 alone, Naver paid 73.4 billion won ($US65.5 million) in network usage fees. I would like Google to disclose how much it is paying in network usage fees to South Korean telecommunication companies,” Han added.

Han expressed “deep regret” that Google had implied that it was different from Naver in regard to the fairness of its search results. “It’s the duty of search engines to deal with manipulation, which is a job that’s never over. I wonder whether Google can say that it hasn’t had a single case of manipulation,” he said.

Han wrapped up the statement by saying, “What this comes down to is a reasonable request about market rules: that all companies, whether foreign or domestic, should compete under equal conditions. I hope that Google will offer a clear response so that a level playing field can be created.”

In related news, Naver recently apologized for rearranging news articles at the request of other parties and promised to solicit external opinions from users, the academy, the press and civic groups in order to devise a solution. But it did not announce a specific time period for such measures to be taken.

By Ahn Seon-hee, staff reporter

Please direct questions or comments to [[e-mail]]