SoftBank’s internet business Z Holdings said on Tuesday it would halt access to chat app Line’s user data from within China and stop storing user content in South Korea after media reports lead to scrutiny of the tech firm’s data management.
Z Holdings Co-Ceo Takeshi Idezawa apologised at a press briefing, saying the firm needed to work to regain users’ trust following an Asahi newspaper report that it let engineers in China access user data without informing them.
Backed by South Korea’s Naver Corp and with strongholds in Thailand, Taiwan and Indonesia, Tokyo-based Line merged with Yahoo Japan this month creating a pan-Asia challenger to face down larger tech rivals.
However, Z Holdings has been left scrambling to tighten its data protection as companies around the world come under scrutiny over their relations with China at a time of elevated friction with the United States.
Earlier on Tuesday shares in e-commerce company Rakuten, which has launched a mobile network, fell after media stories highlighted risks from a recently announced stake sale to China gaming giant Tencent.