Naver Goes ‘Water Demon’ in Escalating Beef with Google

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If you looked up “Naver” on Naver, South Korea’s main web portal, on Friday afternoon, the top news result was a headline about the company receiving an innovation award. If you typed the same terms into Google, you’d get an op-ed from the Kyunghyang newspaper titled, “Naver and Its Manipulation of Public Opinion.”

The disparate results illustrate the nature of an ongoing beef between Naver and Google Korea about spoiling fair competition in South Korea’s IT industry.

It started last week, when Naver was called to a parliamentary audit. Lawmakers accused South Korea’s largest online search engine of prioritizing certain kinds of news and excluding others, in addition to auctioning off preferable positioning in search results. At the audit, Lee Hae-jin, founder of Naver, apologized for an instance of removing an article that criticized South Korea’s professional soccer league, at the league’s request.

But the way in which he defended Naver raised eyebrows: He attempted to draw negative attention toward global tech giants including Google and Facebook. As many local media outlets point out, Lee mentioned Google 14 times in the audit, accusing the company of making money in the South Korean market without paying its fair share of taxes, among other allegations.

Yesterday, Naver CEO Han Seong-sook chimed in with a statement on Naver’s official blog. After a paragraph commenting on the audit and claiming that Naver feels a renewed sense of social responsibility, Han went on for 48 paragraphs listing grievances against Google, including the company’s lack of transparency in paying taxes and its lack of contribution to the domestic job market.

Han’s accusations didn’t come out of nowhere; they were a response to a Nov. 2 statement from Google Korea, which denied the allegations Lee made during the audit. “Lee Hae-jin’s inaccurate and misleading statements are regretful,” Google Korea said, emphasizing that it hires hundreds of employees and pays its taxes as stipulated by South Korean law.

(But because it is a limited liability foreign company, it isn’t obligated to publicize its exact fiscal information, including annual revenue.)

While Naver’s criticisms against Google Korea are worth investigating, it’s also possible that, at a time of vulnerability, Naver is looking to throw dirt on the practices of another tech titan. “This is Naver’s water demon strategy,” commented an IT Chosun article. The mulguisin (water demon) strategy boils down to, “If I’m going to drown, I’m taking you with me.”

Naver declined to comment on claims that the company is trying to divert public attention away from its own wrongdoings.

Naver currently dominates South Korea’s search engine market at over 70 percent for PC users. Google, by contrast, is less than 10 percent, but steadily increasing its market share. It already overshadows Naver in the app and video market. According to Korean Click, 72.8 percent of video usage in September was on Google’s YouTube, while Naver was at 2.7 percent.

 

Cover image: Google and Naver. (Source: Google logo via Pixabay, CC0 Creative Commons; Naver search window via Wikimedia Commons, not subject to copyright)

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