Watcha files complaint accusing LG Uplus of theft

Watcha, a Seoul-based streaming service provider, filed a complaint against LG Uplus to the country's antitrust regulator for allegedly stealing the company's technology.

Watcha blamed the mobile carrier for interfering with its business activities by stealing key technologies including its content recommendation algorithm and data related to platform service management.

Watcha said the mobile carrier initially approached the company in October 2022 by floating the possibility of investment or even acquisition, when Watcha was struggling to make a profit.

However, after acquiring the information to what Watcha claims as some of its core technologies, LG Uplus withdrew the deal.

Last year, Watcha posted an operating loss of 55.5 billion won ($41.48 million), a loss that increased more than twofold compared to the year before.

“LG Uplus requested a variety of information from Watcha, but there were consistent inquiries from the former asking to file data related to specific technologies that made it difficult to believe that it was part of standard procedure,” said a Watcha spokesperson. “Then, the deal was nullified without a specific cause in May.

“We can only speculate for now that LG Uplus utilized our data to reform its Internet Protocol Television service, since it announced [in May] that it will release its own in-house streaming service the following year,” the Watcha spokesperson added.

LG Uplus, on the other hand, denied the accusation, arguing that “the inspection was a routine procedure to evaluate the company’s value.”

“LG Uplus did consider investing in Watcha with the purpose of acquisition to create synergy in the company’s media business,” an LG Uplus spokesperson said. “However, the deal was canceled considering [the acquisition’s] effects and circumstances of the domestic streaming market. The inspection itself was conducted legally in a typical manner with both sides signing the nondisclosure agreement. During the process, LG Uplus did not ask for excessive information or know-hows beyond the compulsory requirements, nor did we utilize this information in our services.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]