November 22, 2024

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[THE INVESTOR] The Korean government on Aug. 24 postponed to make its final decision on whether to allow Google to bring detailed map data out of the nation.

The joint reviewing body of government ministries and agencies delayed their decision, citing the importance of the issue for Google, the local internet market and society as a whole.

“The reviewing body will further discuss with Google on the matter and make a discreet decision,” the state-run National Geographical Institute said in a statement.

The final decision will be made by Nov. 23, the NGI said.

Google had asked the Korean government for permission to store and use the nation’s detailed map information, which would allow it to roll out full-fledged Google Maps services here.

But the Korean government had rejected those requests, citing that access to map information might impact national security, as South Korea is technically still at war with North Korea.

Google made its latest official request in June. 

“Unless Google accepts some of the Korean government’s requests, (such as) the establishment of a data center and the pixilation, or wipe-out, of the nation’s military facilities on the digital map, it seems that it will be an uphill (task) for Google to get the permission,” an industry source said.

The state-run National Geographical Institute had previously suggested that Google comply with the two requirements. However, the company said it would neither set up a data center in Korea nor wipe out certain locations from its map services.

It claimed that mapping data will still need to be stored at data centers abroad to provide optimal services for global Google Maps users, and that such sensitive information is already available through other mapping services provided by private companies.

Critics have speculated that Google has been taking advantage of a legal loophole to avoid paying taxes.

Korean laws stipulate that foreign companies without fixed facilities such as data centers are not obliged to pay corporate taxes -- an article which some lawmakers and civic groups hope to change.

Ahn Jeong-sang of the major opposition Minjoo Party, suggested in his recent policy report that limited companies established by foreign firms should be subject to an external audit, law articles requiring foreign limited firms to pay taxes should be set up and there should be a change in taxation standards in the current tax treaty between Korea and the US.

Google, which dominates the local operating system market with more than 84 percent market share, earned 3.19 trillion won ($2.86 billion) in sales in 2015 through its Google Play app store, according to data compiled by the party.

Google’s video-streaming service YouTube earned up to 30 billion won in revenue, topping the local video-streaming segment with its market share of 43 percent.

In 2015, internet firms Naver and Kakao, both of which operate map services here, earned 3.25 trillion won and 932.1 billion won in sales, respectively.

Korean firms that make more than 50 billion won in annual profits are subject to a tax rate of 22 percent.

Naver paid 2.05 trillion won in corporate tax, while Kakao paid 28 billion won in corporate tax last year.

Google reportedly pays some taxes every year, but the exact amount has not been made public.

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