SEOUL, Nov. 3 (Korea Bizwire) – Naver and Google are embroiled in a fight over transparency and credibility after the South Korean web portal accused the American IT giant of not paying taxes and creating too few jobs.
Naver founder Lee Hae-jin launched a scathing attack on Google during a recent parliamentary inspection, where he said Google doesn’t even pay taxes and makes little to no contribution to job creation in South Korea.
Following the damaging claim, Google Korea issued a statement on Thursday, saying, “It’s regretful that the former chairman of Naver Lee Hae-jin made an ill-informed and misleading comment during the State Affairs Committee’s parliamentary inspection at the end of last month.”
In response to Lee’s claim that Google doesn’t pay taxes, the IT giant said Google is “paying taxes in South Korea and follow all domestic tax laws and tax treaties.”
Google then went on to address several other claims in the statement including job opportunities, its contribution to the South Korean economy, as well as manipulation of keyword rankings.
“Currently, hundreds of staff members are working at Google Korea. In addition, we are proud of the contribution we made to job creation in South Korea by providing support for creators, developers and companies to establish a brand and bring about innovation,” Google Korea explained in a statement.
The IT giant also denied Naver’s allegations of click fraud and ranking manipulation, calling the accusations ‘completely false’.
While Google says search results are purely based on its ranking algorithm system without any financial or political influence, Naver again raised doubts about Google’s claim over the transparency of its tax records.
“Google Korea’s argument raises a question of credibility when they don’t disclose their profits or how much they pay in corporate taxes,” Naver said.
Registered as a limited liability company, Google has no obligation to make public its company financials in South Korea.
At another parliamentary inspection this year by the Ministry of Science and ICT, John Lee, who heads the South Korean unit of the company, refused to answer when asked to disclose sales figures.
Naver has said Google Korea’s contribution to job creation is too small, based on industry speculation that Google makes around 4.5 trillion won per year in sales in South Korea.
Ashley Song (email@example.com)