[Japan] Line’s parent firm to examine personal info breach

MONDAY, March 22, 2021

The first meeting of a third-party panel to investigate why engineers at a Chinese affiliate were able to access the personal information of LINE messaging app users will be held on Tuesday, LINE Corp. parent company Z Holdings Corp. has announced.

Having garnered 86 million users in Japan, the popular messaging app is also used widely by government agencies and companies, creating an urgent impetus for the provider to diagnose vulnerabilities that lead to the breach and make countermeasures to prevent a recurrence.

The third-party panel will be composed primarily of university professors and lawyers with expertise in the protection of personal information.

According to sources, Z Holdings was informed of issues with the app’s handling of personal information in late January, before merging with LINE Corp. earlier this month. Z Holdings made inquiries with the operator, which revealed that the personal information of Japanese users had been left accessible for a period of nearly 2½ years to a Chinese company that had been entrusted with development work.

Noboru Nakatani, Z Holdings’ group chief trust and safety officer, attended a subcommittee meeting at the Liberal Democratic Party headquarters on Friday to account for the issue. “The Chinese company was able to view [the personal information of LINE users],” Nakatani told reporters after the meeting. “It was inappropriate.”

Other tech companies have questioned LINE’s loose personal information protocols, given how firms such as Rakuten Inc., for example, have a policy of securing users’ personal information before granting access to contractors at overseas subsidiaries.

“Global companies are more and more cautious when it comes to handling personal information,” said an executive at another major tech company. “I’m baffled as to why [LINE] would fail to take thorough precautions.”

The LINE app has become an essential tool in Japan’s social fabric, relied on by individuals and corporations alike.

TEPCO Energy Partners Inc. and Tokyo Gas Co. have introduced services by which customers can check their bills using the app. SMBC Nikko Securities Inc. also offers a service that lets customers view their account balances via LINE.

Yet a number of companies, including Toyota Motor Corp., have enacted blanket bans that prohibit employees from using the app for work.

Now that some central government offices have already decided or are mulling whether to cease providing administrative services over LINE, many other companies may soon feel pressure to follow suit and reexamine their approach to the app.