Google under probe in S.Korea over data collection

Google has been preparing since late last year to launch its "Street View" service in South Korea, and the data collection was related to the launch, police said.

The probe in one of Asia's most wired countries came as a fresh setback to Google, which already faces investigation over "Street View" by 37 U.S. states as well as an informal investigation by the U.S. Federal Trade Commission, and a variety of probes overseas and class action lawsuits.

Google confirmed in an emailed statement that South Korean police visited the company's office in conjunction with their investigation around data collection by Street View cars. It said the company would cooperate with the investigation.

Google's Street View cars are well known for crisscrossing the globe and taking panoramic pictures of the city streets, which the company displays in its online Maps product.

In May, Google revealed that the cars also accidentally collected computer users' personal information transmitted over unsecured wireless networks due to an experimental piece of computer code mistakenly used by the car's equipment.

"(The police) have been investigating Google Korea LLC on suspicion of unauthorized collection and storage of data on unspecified Internet users from Wi-Fi networks," the Korean National Police Agency said in a statement.

The police inspected the Google Street view cars and asked questions of staffers at Google's office during the unexpected visit.

Security experts have said the data picked up by Google could include people's email messages and passwords, although Google has said that the United Kingdom's data protection authorities recently concluded that no "meaningful personal information" was collected by the cars.

Google, the world's No. 1 search engine, does not break out what portion of its nearly $24 billion in annual revenue comes from South Korea.

The company currently operates its flagship Internet search service in South Korea, as well as other services like its Android smartphone software.

BGC Partners analyst Colin Gillis said he did not expect the South Korean probe to have any material impact on Google's financial results. But he noted that the probe represents the latest in a series of overseas legal and regulatory inquiries that increase the company's "sovereign risk."

"These things always could escalate. It would be disappointing to have another loss within Asia," said Gillis, referring to Google's confrontation with China over Internet censorship earlier this year.

Google's license to operate in China was recently renewed for one year, but Google chief executive Eric Schmidt has said that Chinese authorities could shut Google down at any time.

Schmidt told reporters on the sidelines of a conference last week that the data collected by the Street View cars fit onto a single 500MB hard disk drive, which Google currently has locked inside a safe.

Schmidt said he has not seen the data on the disk drive.

Google Street View is a technology featured in Google Maps and Google Earth that provides panoramic views from various positions along many streets in the world.

Collecting the Wi-Fi data was unrelated to the Google Maps project, and was done instead so that Google could collect data on Wi-Fi hotspots that can be used to provide separate location-based services. But Google apparently thought it was only collecting a limited type of Wi-Fi data relating to the Wi-Fi network's name and router numbers.

Google grounded its Street View cars following its discovery of the snafu, but recently began driving the cars again in certain regions.

(Reporting by Yoo Choonsik; Additional reporting by Cheon Jong-woo and Cho Meeyoung; Editing by Lincoln Feast, Gary Hill)