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THE INVESTOR

Mobile & Internet

Naver CEO blames Google for tax dodging, freeriding in Korea

  • PUBLISHED :November 09, 2017 - 18:49
  • UPDATED :November 09, 2017 - 18:53
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[THE INVESTOR] Internet portal giant Naver is stepping up the attack on its US rival Google, bashing the latter for exploiting the Korean market by neither paying taxes nor keeping its promise to hire locals.

In a statement released on Nov. 9, Naver CEO Hahn Seong-sook called on the US internet firm to unveil its exact amount of sales and profits in the domestic market and how much taxes it pays.



"The company has just said that it has been paying due taxes (without revealing the actual amount), and Google Korea CEO John Lee refused to unveil the actual revenue it earns in Korea 'due to some sensitivities,' in a recent parliamentary audit," CEO Hahn said in the statement.

"The fact that the US firm hides its earnings in the Korean market makes it hard to believe it actually pays due taxes here."

Google releases the annual sales figures in some global markets, including the UK, while being discreet about its Korean operations.

Hahn also raised doubts on the US internet firm's promise in 2006, in return of a US$1.2 million government subsidy, to hire Korean researchers and developers.

CEO Lee said in the audit held earlier this month that Google operates the online advertisement business only and other key businesses, such as YouTube and Google Play, are managed at its head office in San Francisco -- a comment that made many wonder if the US firm hires a reasonable number of R&D employees, compared to its revenue size in the domestic market.

Google said it employs Korean nationals for R&D here, but did not give further details.

In regard to the controversy over Naver's alleged manipulation of its news arrangement system, Hahn argued Google, like Naver, may have similar issues regarding news arrangement, advertisement and its search system.

"Businesses that make certain keywords and content conspicuously appear on Google's search platforms have been thriving in the US, and Google has been trying to prevent such attempts that abuse its search ranking system," said Hahn, adding that it  proves Google's search engine is not free from schemes that distort its platforms.

The Naver CEO also said Google, which received flak for enjoying a free ride of internet networks, needs to disclose how much it pays for using them in Korea.

By Kim Young-won (wone0102@heraldcorp.com)

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