SoftBank and Naver helped bridge geopolitical relations with a joint venture to own the operator of the messaging app Line, but now the partnership is fraying.
A joint venture set up in 2019 by two top Japanese and South Korean companies was hailed as a beacon of cooperation amid strained diplomatic relations.
Executives from South Korea’s Naver and Japan’s SoftBank Group said they would jointly own the operator of Line, a South Korean-developed messaging app popularized in Japan. They gave the project a code name that emphasized cooperation: Gaia.
Five years later, Japan and South Korea have made significant strides in easing longstanding historical tensions. But a rift has emerged over the ownership of the Naver-SoftBank venture, and diplomats and international relations experts fear it could again put stress on ties between the countries.
Japan and South Korea, both key United States allies in Asia, have a sensitive history. Japan colonized Korea from 1910 until Japan’s surrender in World War II in 1945, and Japan and South Korea have often scuffled over territory and geopolitical differences.
“As we’ve seen many times in the past, relations between Japan and Korea shift, and smaller points of tension — whether they be wartime or modern — can quickly escalate to impact defense and diplomacy more broadly,” said Maiko Takeuchi, regional managing director at CCSI, a group in New York that advises governments on international security issues.
The stakes are elevated given concerns about North Korean nuclear proliferation and heightened instability in the region, Ms. Takeuchi said. “There is a strong view from the U.S. and elsewhere that preserving Japan and Korea’s good relations is more important than ever,” she said.