Supreme Court declines to review Korea's 154 billion won royalty claim on Google Korea

A dismissal without review means the top court rejects an appeal without examining the merits ^[11], and the second division, with Justice Oh Kyung-mi presiding, did that on the 8th ^[2]. The appeal came from the head of the Yeoksam District tax office ^[3]. The 154 billion won result is therefore the product of two lower-court judgments ^[6][13], and any reading across to other companies has to stay as narrow as their reasoning.

The first court rested on Google's structure. It noted that Google Korea does not own the physical facilities, such as data centers, needed to provide advertising services, and that the Singapore affiliate is the entity actually providing them ^[7]. JoongAng Daily adds that the court found it difficult to view the payments as compensation for know-how or for information related to knowledge or experience ^[8].

We think the result depends on that structure. A Korean unit that owned the servers or delivered the service itself would put different facts in front of the same tax office, and the royalty argument would be live again. The counter-thesis is respectable: the tax office's royalty theory ^[5] lost in the first court, lost again when the appeals court found the first ruling justified ^[13], and then drew a dismissal without review ^[11], so the office may not try it on the next advertising-funded subsidiary at all. A lower court that applies this reasoning to a subsidiary owning its own infrastructure would show our narrow reading is too cautious.

Seoul Economic Daily describes the lower-court ruling as one that partly favored Google Korea ^[9]. The "partly" is the Gangnam claim, and the cancelled total still stands at about 154 billion won ^[1].

The two English-language reports convert that total differently. Seoul Economic Daily gives $107 million ^[10]; JoongAng Daily gives $116 million for an assessment it puts at more than 154 billion won ^[12]. Those imply about 1,439 won to the dollar ^[14] and about 1,328 ^[15], and the higher dollar figure is 8.4% above the lower ^[16]. The won figure is the one both reports share. Neither says whether Google Korea had paid any of the assessment before the case closed.