CONTENTS
- 1. US Litigation | Naver Affiliates Named as Defendants in a US Class Action
- - Why the Collection of Biometric Information Became an Issue
- 2. US Litigation | Jurisdiction, Service, and Discovery as the Key Variables
- - Key Issue of US Litigation (1): Jurisdiction
- - Key Issue of US Litigation (2): Discovery
- - Key Issue of US Litigation (3): Class Actions and Settlement Pressure
- 3. US Litigation | Response Strategies That Global Platform Companies Should Review
- - Comprehensive Legal Advisory for Responding to International Disputes
1. US Litigation | Naver Affiliates Named as Defendants in a US Class Action
For a global platform company, US litigation can be a process in which the entire service structure and corporate governance is examined in court.
In July 2021, a large-scale class action was filed in the United States District Court for the Northern District of California, naming nine Naver group entities as defendants, including Naver, Naver Cloud, Naver Cloud America, Snow, Snow Inc., Z Holdings, Line, Line Plus, and Line Euro-Americas.
The plaintiffs claimed that the camera app B612 and the Line messenger collected, stored, and used facial geometric features of users, such as the contours of the face and the distances between the eyes, nose, and mouth, without lawful consent.
The central point was that these apps must scan and process users' biometric information in order to run their beauty-retouching, AR effect, and 3D sticker features.
The plaintiffs claimed that this information was collected without the prior notice and express written consent required by US personal data and biometric information protection laws, and they sought not only damages but also an injunction requiring that the conduct cease.
Why the Collection of Biometric Information Became an Issue
The information at issue in this case is biometric information, which is treated as far more sensitive than ordinary personal data.
Biometric information has the following characteristics.
- It is highly identifying, including facial feature values and facial geometry information.
- Once leaked, it cannot be changed the way a password can.
- It carries not only the risk of privacy invasion but also the risk of misuse for security breaches and crime.
Because of these characteristics, there is a strong tendency in the United States to regard biometric information as high-risk information that requires strict prior consent and purpose limitation.
In particular, the plaintiffs took issue with the points that the Naver affiliated services did not sufficiently inform users of the very fact that biometric information was being collected, and also did not clearly disclose how that data was shared with internal company systems or with third-party systems.
2. US Litigation | Jurisdiction, Service, and Discovery as the Key Variables
In US litigation, the first barrier a company encounters is procedural response rather than the merits.
In this case as well, shortly after filing the complaint, the plaintiffs went directly to the local address in Santa Clara, California, and completed service on the US affiliates through personal direct service.
When proper service is effected in this way on subsidiaries within US territory and on agents for service, the defendant has difficulty buying early defense time on the ground of defective service.
The court required the defendants to file an answer or a motion to dismiss within 21 days, and the structure was such that, absent an appropriate response within the deadline, there was even a risk of a default judgment.
Rather than immediately waging an all-out fight, Naver first filed a stipulation extending the answer deadline to secure time, and thereafter refined its defense reasoning through a certification of interested parties reflecting its complex multinational governance structure, along with various declarations and procedural filings.
In this case, the plaintiffs filed a second amended complaint in July 2025, and Naver filed answers and additional briefs in September and November of the same year, so the case has entered a full stage of contest on the merits.
In addition, as of March 2026, the retention of new counsel by both sides and the coordination of the future trial schedule are underway, so the case is at a stage of preparing for the next steps within a prolonged litigation phase.
Key Issue of US Litigation (1): Jurisdiction
One of Naver's central defense arguments was the absence of personal jurisdiction in the California courts.
The main arguments were as follows.
- The Korean headquarters and the Japanese affiliate are not entities that directly conduct business within the United States.
- There were insufficient contacts with the State of California.
- The entities responsible for operating services for US users and for processing data are separated by each corporate entity.
The plaintiffs, by contrast, rebutted this and advanced the following reasoning.
- The app users in the United States number at least in the tens of millions.
- A substantial user base also exists within California.
- The failure to apply geoblocking technology is a circumstance indicating active targeting of the US market.
- The US subsidiaries are substantively connected with marketing, app publishing, and server infrastructure.
In the end, the court found that it could not resolve this issue on Naver's filings alone, and it ordered jurisdictional discovery.
Key Issue of US Litigation (2): Discovery
The stage in US litigation that companies feel as the heaviest burden is, without question, the discovery system.
Once the court moves the case to a hearing on the merits and the examination of evidence, a company may face pressure to produce materials such as the following.
In this case as well, the plaintiffs took issue with the operation of the SenseTime SDK embedded in the Naver affiliated services and with its data flow, and they actively sought to prove the connecting structure between the US related companies and the Korean and Japanese headquarters.
In addition, the court granted part of the defendants' early motion to dismiss, while finding that a hearing on the merits was possible as to the alleged unauthorized collection of biometric information, and it later again adjusted the scope of dismissal relating to Snow, while keeping the B612-related allegations within the scope of continued review.
Key Issue of US Litigation (3): Class Actions and Settlement Pressure
US litigation, and class actions relating to personal data and biometric information in particular, exert strong pressure on companies even before a judgment on the merits.
The reasons are as follows.
- The mere possibility of class certification increases bargaining power.
- Enormous discovery costs arise.
- The risk of disclosing trade secrets and technical information is significant.
- The possibility of punitive damages or a large settlement exists.
In fact, in similar cases, Facebook (Meta) paid a settlement of approximately 650 million dollars at the end of a biometric information class action, and TikTok (ByteDance) likewise settled for approximately 92 million dollars.
3. US Litigation | Response Strategies That Global Platform Companies Should Review
A company that has entered the US market or that provides services to US users should review US litigation risk from the service design stage onward.
Platform and app service companies in particular need to review the following matters as a priority.
Area of Management | Main Management Method | Points for Companies to Note |
Structure for collecting personal data and biometric information | Review the items collected and the processing flow | Sensitive information such as facial feature values can give rise to separate legal risk |
Terms of service and consent procedures | Refine prior notice and express consent language | Consent requirements under US state law may be stricter than domestic standards |
Management of business contacts within the United States | Review the geoblocking, local marketing, and app publishing structure | The more contacts there are within the United States, the greater the possibility that jurisdiction will be recognized |
Multinational affiliate structure | Distinguish the roles of the headquarters, subsidiaries, and related companies | There is a possibility that the entire group will be bound together in a joint liability structure |
Discovery response | Establish a system for preserving and screening internal documents and source code | The risk of leaking technical secrets increases at the discovery stage |
Early response to a dispute | Establish a strategy for service, answer deadlines, and motions to dismiss | A failure to respond within the initial 21 days can be procedurally fatal |
Settlement and ADR strategy | Review the possibility of conciliation, arbitration, and a confidential settlement | In prolonged litigation, cost and reputational risk increase sharply |
For Korean platform companies in particular, the following advance measures are important in order to reduce US litigation risk.
Because responding only after a complaint has been filed has its limits in US litigation, it is necessary to structurally reduce legal risk from before the service launch or from the stage of expanding into the US market.
Comprehensive Legal Advisory for Responding to International Disputes
US litigation is a complex international dispute that combines jurisdiction, service, class actions, discovery, ADR, the protection of technical secrets, and the response to personal data regulation.
In particular, when a platform company or an IT company becomes embroiled in US litigation, it may have to bear, beyond the issue of damages, the disclosure of internal technical materials, harm to corporate reputation, and disruption to global business expansion at the same time.
At Daeryun Law Firm LLP, attorneys with experience in international disputes, personal data, corporate legal affairs, and US litigation response work together to provide comprehensive support, including early response strategy relating to US court litigation, jurisdictional disputes, discovery response, review of affiliate structures, and the development of settlement and ADR strategies.
In addition, through collaboration with the US local law firm SJKP, the firm provides a one-stop service that extends to responding to US federal court litigation procedures, managing collaboration with local law firms, analyzing multinational corporate structures, and reviewing personal data and biometric information regulatory risk.
If you are operating services in the US market, or are providing platform or app services to US users, it is important to review the matter proactively before US litigation risk becomes a reality.
If you need assistance, you are welcome to confirm a specific direction for your response through 🔗Booking a Legal Consultation.
Daeryun, the ninth-ranked law firm in Korea (based on 2025 National Tax Service value-added tax filings), assists in resolving cases through the systematic strategies of legal experts across multiple fields.
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