Japan urges Line operator to improve data protection

Japan urges Line operator to improve data protection

Major data breach exposed weak cyber defences of Korean shareholder

Japan urges Line operator to improve data protection
(Photo: Bloomberg)

Japan’s communications ministry on Tuesday urged LY Corp, the operator of the Line messaging app, to strengthen the protection of users’ personal data following a massive data breach.

The Ministry of Internal Affairs and Communications said the app provider relies heavily on Naver Corp of South Korea, a major shareholder of LY, to operate the system and lacked appropriate countermeasures against cyberattacks.

Line had 194 million users globally as of September 2022, according to the most recent figures provided by the operator. Of those, 93 million were in Japan, 53 million in Thailand, 22 million in Taiwan and 8 million in Indonesia, it said.

The ministry called on the Japanese company to improve its operations through a review of its capital relationship with Naver as it is under “considerable influence” from the South Korean company.

LY was 64.5% owned by A Holdings Corp, which is half-owned by the Japanese telecom holding group SoftBank Corp, with the other half owned by Naver, as of October last year.

LY said in November that as many as 440,000 items of personal data, including those related to its users and business partners, had been leaked due to unauthorised access. A subsequent investigation revealed that the number was 510,000.

The leakage was caused when malware infected a server of Korea-based Naver Cloud Corp, through a computer of a subcontractor. Naver Cloud and LY share an in-house system for dealing with employee and other personnel information, and this allowed unauthorised access into LY’s internal system, according to LY.

The Japanese app operator had a similar data security issue in 2021, and is now required to regularly report the progress it is making in improving its operations.

“We strongly demand (LY) ensure its users’ interests are protected,” communications minister Takeaki Matsumoto said at a news conference on Tuesday.

LY president Takeshi Idezawa told reporters following the administrative measure that his company will “do our utmost to create an environment where our customers can use our services safely”.

LY is considering punishing its executives over the data leakage, Idezawa added.

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