Pseudo Online News Outlets Blackmail Businesses

Officials of Conglomerate “A” were startled when they saw a groundless article on a portal site last month. The internal dynamics of the group exposed in the article were far from the truth.

In response, A’s public relations office called the online news outlet that provided the inaccurate information to the portal site and lodged a protest. Surprisingly, a senior official of the news outlet demanded A to pay them 50 million won in return for removing the article from the portal site. He even threatened A, saying, “If the company does not cooperate, we will keep posting articles unfriendly to A.”

Korean companies are suffering from the high-handedness of pseudo online news outlets that have sprung up in the wake of the Internet craze. The key link that makes this ill structure possible is Internet portals.

○ “Pay for our ill-conceived article or else”

Conglomerate “B” was harassed by an employee of its affiliate’s partner company early this year. The employee stole information about B and notified the company, saying, “I’m about to establish an Internet media company and write articles about B. If you have anything to explain about it, please do so.” As B showed no response to the warning, he demanded money, saying, “I may consider not writing the article.” B kept ignoring his threats and he pestered the company by submitting a poorly written article about B to weekly magazines and online news outlets.

Company C has even launched a task force team because of continuing threats from pseudo online media. “Those (online) media companies have formed a kind of network. Even if we comply with the demands of one or two companies, it doesn’t end there,” an official of C said. “Although we now have our task force team, we find it frustrating because there is no legal means to counter blackmailing.”

According to the Ministry of Culture, Sports and Tourism, the number of officially registered Internet newspapers more than tripled from 286 in late 2005 to 927 in 2007. “The number of unregistered companies providing online news is probably bigger than that of the registered ones,” a government official said.

Business officials commonly point out that existing registration requirements have long been considered ineffective and some of the Internet media, which have lost their ability to control or cleanse themselves, have begun to take the high-handed way of doing business. Corporate PR professionals even jokingly say that they can make a fortune if they quit the company and make an Internet news outlet.

○ Are portals involved in blackmailing corporations?

Online portals reportedly play a significant role in helping those rogue online news outlets to blackmail corporations.

In a recent seminar held by the Korea Advertisers Association with some 60 business representatives and officials from major online portals such as Naver and Daum, business representatives criticized the portals, arguing that they practically play the role of the media but do not take responsibility for misleading articles.

“It is no secret in the business world that some unidentified internet news outlets pay online portals in exchange for providing their content. However, portals and those companies are strongly denying it,” said an official of a conglomerate.

Company D has been badly hit by the misleading information provided by an Internet company. “The first thing they tell us on the phone is that they are a media outlet providing news to online portals,” said an official of the company. “Portals are their biggest weapon and their lifeline.”

Major domestic companies reportedly receive 20 to 30 blackmail threats a month. “There must be a considerable number of companies giving money to those online media because one or two facts of their articles may turn out to be true,” an official of a conglomerate said.

On this regard, a portal site official said, “It is difficult to cancel the contract with a problematic outlet because we receive a lot of pressure from other outlets if we try to do so.”