Google Inc.'s Seoul office was raided on Tuesday on suspicion its mobile advertising unit AdMob had illegally collected location data without consent, South Korean police said, the latest setback to the Internet search firm's Korean operations.
The probe into suspected collection of data on where a user is located without consent highlights growing concerns about possible misuse of private information as the use of mobile devices such as smartphones and tablets increases.
Such information is viewed as crucial for the burgeoning mobile advertising sector as it helps personalize online ads according to individual preferences or locations.
Last month, Apple Inc defended its use of iPhone location data, but denied that it was tracking the movements of customers, while consumer electronics giant Sony is grappling with a massive data breach.
"Every technology has a flip side. Location-based services benefit customers by helping them find nearby restaurants, gas stations and other places with their smartphones," said Kim Kwang-jo, a computer science professor at the Korea Advanced Institute of Science and Technology.
"But it could potentially violate consumer privacy. There are loopholes in location-based services, and companies should get consent from customers to collect location data."
"We suspect AdMob collected personal location information without consent or approval from the Korean Communication Commission," a South Korean police official said.
A Google spokesman confirmed that the police had visited its Seoul office and told Reuters the company was cooperating with their investigation.
Google and Apple have been targeted by U.S. lawmakers over their protection and use of consumer data from cell phone applications such as where users are located.
Google executives have talked about the ability to target advertising to users based on location.
Google bought AdMob, a leading global mobile ad firm, last year for $750 million.
Seoul police also raided the offices of local portal Daum Communications over similar suspicions, Daum said on Tuesday.
Daum said location data collected by its mobile ad services was not illegal as it was anonymous and could not be used to track individuals.
Google has already been the subject of a series of probes in the United States, Britain, France, Singapore, Switzerland and South Korea over data collected by its controversial fleet of "Street View" cars.
Seoul police concluded in January that Google collected location information and other data from 600,000 wireless Internet users in South Korea with three Street View cars.
The U.S. Federal Trade Commission is also considering a broad investigation into Google and reportedly alerting high-tech firms to gather data ahead of a probe of Google's dominance of the Internet search industry.
South Korea's top Internet portals filed a complaint with anti-trust regulators last month claiming Google was unfairly stifling competition in the mobile Internet search market of one of the world's most wired countries.
In South Korea, Google is one of smallest players in the fixed-line Internet search market, but it enjoys a near 20 percent share in the mobile Internet market, backed by its Android platform.
Google, which controls roughly two-thirds of the global search market, is a stellar performer in the booming smartphone and tablet market, as device makers such as Samsung Electronics and LG Electronics increasingly adopt its free Android operating platform to counter heavyweight Apple.
Global technology firms, including Microsoft, are trying to rein Google's growth.
The global smartphone market is forecast to grow 58 percent this year and Android will account for 39 percent of the market, according to research firm Gartner. In the tablet market, Apple's share will gradually decline to 47 percent by 2015 from 69 percent this year, with Google's share forecast to rise to 39 percent from 20 percent now, Gartner said.
(Additional reporting by Miyoung Kim and Jonathan Hopfner in SEOUL and Kenneth Li in NEW YORK; Editing by Dhara Ranasinghe and Muralikumar Anantharaman)