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Responsible AI Initiatives

LY Corporation (the "Company") is committed to protecting user privacy and ensuring proper information management while widely utilizing various AI technologies in services and development, in line with its Basic Policy on AI Ethics. Specifically, for generative AI, the Company aims to become the most active user in Japan by building and enhancing the technical infrastructure and usage environment for employees. By promoting the use of generative AI to improve operational efficiency and providing more convenient services to users, the Company strives to expand its revenue in the medium to long term.

Generative AI Adoption Cycle

Leveraging its strengths, such as extensive Japanese data and numerous touchpoints with Japanese users, the Company is developing a "highly practical" environment to propel the cycle of adopting generative AI.

Generative AI Adoption Cycle — Diagram

The generative AI adoption cycle illustrates that LY Corporation, which has one of Japan's largest user base, offers a highly practical environment to propel the cycle of adopting generative AI. 1. Utilization foundation (usage environment) — Organizations, governance, employee education for AI utilization 2. Utilization foundation (development environment) — Technologies for AI utilization 3. Business usage — Enhancing efficiency in employee productivity 4. Application in services — Delivering WOW! to users

1. Developing utilization foundations (usage environment)

As guiding principles to use AI safely while protecting user privacy, LY Corporation establishes guidelines and rules such as Basic Policy on AI Ethics. For details, please refer to "Responsible AI."

2. Building utilization foundations (development environment)

LY Corporation adopts a multi-vendor strategy meaning that it works to create an environment where employees can choose from a variety of generative AI options, collaborating with the best partner to build the technological foundation for utilizing generative AI. Large language models provided by multiple AI development companies, including OpenAI and Google, are also made available.

3. Propelling business usage

Trainings on the risks of generative AI and prompt crafting techniques are mandatory for all employees and officers,* ensuring they acquire basic knowledge and literacy. With this foundation, they can utilize an in-house conversational AI assistant, "ChatGPT Enterprise," starting from June 2025. These efforts aim to establish a safe environment for employees and officers to utilize diverse generative AI, boosting productivity.
*Includes officers, permanent employees, fixed-term employees, contract employees, temporary staff, part-time employees, and subcontract employees.

4. Application in services

LY Corporation offers various features leveraging generative AI in services such as LINE and Yahoo! JAPAN. For details, please refer to "Applications of Generative AI in Various Services."

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Responsible AI

Measures to Establish AI Governance

In June 2021, LY Corporation established the Expert Panel on AI Ethics where the appropriate use of AI in consideration of societal needs (particularly its ethical aspects), is discussed continuously with external experts. In July 2022, the Board of Directors resolved to establish the Basic Policy on AI Ethics, which is the guiding principle to use AI safely while protecting user privacy.

Furthermore, in October 2023, to realize effective AI governance based on the Basic Policy on AI Ethics, the AI ethics governance division was established.

In May 2025, in line with the principles outlined in the Basic Policy on AI Ethics, the Company established the Basic Regulations on AI Governance which define the framework and responsibilities related to AI governance. These regulations establish the position of the person responsible for AI governance, to be appointed by the president, and clearly outline the responsibilities of the person responsible for AI governance, officers, employees, and individual organizations.

Additionally, in the same month, the AI Governance Guidelines were updated to respond to the rapid advancements in generative AI technology. These guidelines not only promote proactive AI utilization but also provide detailed recommendations on risk management approaches that align with the latest technological trends.

A vertical timeline is drawn on the left side, with the years and months written in white letters inside blue circles. On the right side, there are speech bubble-shaped frames, each containing descriptions of the respective initiatives. In June 2021, there was the "Deliberation of AI Governance" and the "Established Expert Panel on AI Ethics. "In July 2022, the "Declaration of policy that serves as basis for actions and decisions" and the "Formulated Basic Policy on AI Ethics" took place. October 2023: "Development of a generative AI-adaptive agile governance " and "Established AI Ethics Governance Division. "January 2024: "Conducting Employee Training" and "Conducted company-wide e-learning on generative AI." May 2025: "Proactive utilization/appropriate risk management," "Established Basic Regulations on AI Governance/revised AI Governance Guidelines" are indicated. Overall, it expresses the progress of organizational efforts concerning AI ethics and governance in a chronological format.

The Basic Policy on AI Ethics outlines the following eight items:

  1. Creation of a better future and contribution to mankind prompted by the diversity of information
  2. Realization of a peaceful and sustainable society
  3. Governance controls
  4. Pursuit of fairness and impartiality
  5. Pursuit of transparency and accountability
  6. Ensuring safety and security
  7. Protection of privacy
  8. AI human capital development

To effectively adhere to these principles, the Company undertakes the following initiatives:

  • Multi-stakeholder governance framework
  • Security and privacy protection initiatives
  • Risk assessment and responses on AI usage
  • Employee education
  • Agile governance measures

Multi-Stakeholder Governance Framework

The risks associated with the use of AI extend beyond technical safety and legal compliance—they encompass a wide range of concerns, including privacy and fairness.  When assessing risks, it is necessary to consider how acceptable they are to society at that point in time.

LY Corporation establishes a governance framework that involves diverse internal and external stakeholders to appropriately address these complex and multifaceted risks.

A diagram showing the AI governance structure at LY Corporation. In the center are the "Person responsible for AI governance" and the "AI Ethics Governance Division ," connected to each divisions. At the top are the "Board of Directors" and the "Top Management Committee/President."On the right are the "Risk management division" and the "Corporate administration divisions, etc. (Legal, Intellectual Property, Privacy, Security, etc.)," which share project information with the Governance Department and provide advice and decisions. At the bottom, there is the "Business and Service Department (Employees)," which consults with the AI Ethics Governance Division, and the latter provides advice and makes decisions. Further below, the "Users" are positioned. The "Business and Service Department (Employees)" explains the terms of use and policies to the "Users," and collects their consent and opinions. On the left side, Stakeholders such as "Government and Industry associations," "AI development companies," "AI service providers," and "Research institutions" are lined up, making proposals, cooperating, and reflecting with the AI Ethics Governance Division. Further above, there is the "Expert Panel on AI Ethics," which is connected to the AI Ethics Governance Division.

Within the Company, the AI ethics governance division plays a central role in building a framework where relevant experts can be flexibly involved based on the content of the AI use and nature of the associated risks. This enables LY Corporation to make well-balanced and integrated decisions that take into account the complexity and multifaceted nature of the risks.

For major decisions related to AI governance, the Company draws on the expertise of the Expert Panel on AI Ethics. The Company also refers to a broad range of perspectives, including domestic and international policy trends, public debates, and user feedback, in its efforts to establish transparent and proactive governance that is both collaborative and sound.

Through these comprehensive initiatives, the Company establishes a system to prevent issues associated with the use of generative AI and provides services that users can utilize with a sense of security and safety.

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Security and Privacy Protection Initiatives

Prioritizing user safety and trust, LY Corporation has long been committed to implementing best practices in security and privacy.

Data, which is essential for using AI, is also handled appropriately in accordance with the Basic Policy on Data Protection and LY Corporation Group's Cybersecurity Policy.

In addition to these efforts, the Company is working to provide safe and reliable AI services through ongoing, cross-functional collaboration involving the AI ethics governance division, the security division, and other relevant teams to address challenges specific to AI systems.

Going forward, the Company remains committed to balancing technological innovation with safety, ensuring that its AI services continue to offer a secure experience for all users.

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Risk Assessment and Responses on AI Usage

Balancing Governance and Innovation Through a Risk-Based Approach

LY Corporation takes a risk-based approach to AI utilization, properly assessing potential risks from ethical, legal, and social perspectives, and implementing appropriate measures based on the level of the risk.

A hierarchical diagram shown in a three-layer pyramid structure. The bottom layer is labeled "Low Risk," with countermeasures including: • Identification and internal dissemination of low-risk cases, and • Responsible utilization through employee training. The middle layer is labeled "Medium-level risk." Countermeasures include: • Evaluation of AI risks based on expert knowledge,and • Implementation of risk mitigation measures appropriate to the situation. The top layer is labeled "High Risk," and the corresponding countermeasures include • Decision-making in collaboration with CxOs and other executives, and • Implementation of multifaceted risk assessment and mitigation measures. On the left side, there is a pyramid, and on the right side, horizontal blue bars corresponding to each layer are arranged, with the layers distinguished by varying shades of color.

Specifically, the Company has established a framework that allows for flexible adjustment of support and engagement methods depending on the degree of risk.

When a risk is judged to be high level, the AI ethics governance division takes the lead in decision-making in collaboration with C-level executives, including the CDO and CISO, as well as cross-functional committees.

For medium-level risks, appropriate actions are taken based on expert advice and support aimed at risk mitigation.

Furthermore, for low-risk use cases that do not fall into the categories above, the Company has clearly defined the applicable conditions in advance and ensures that employees are able to to make autonomous and appropriate decisions based on a foundational understanding of AI-related risks gained through mandatory training content.

This framework promotes responsible AI utilization across the Company while encouraging innovation driven by creativity at the operational level.

AI Risk Assessment Based on the Basic Policy on AI Ethics

To appropriately identify and assess risks associated with AI utilization, the AI ethics governance division has identified key AI risk areas based on the Company’s Basic Policy on AI Ethics (as of May 2025).

Key AI risk areas:

  • Respect for information diversity
  • Appropriate quality control
  • Consideration for intellectual property rights
  • Prevention of misuse and abuse
  • Prevention of excessive dependence
  • Appropriate external collaboration
  • Pursuit of fairness
  • Consideration for fair market practices
  • Protection against attacks targeting AI systems
  • Privacy protection within AI systems

In addition to AI-specific perspectives, the Company conducts a comprehensive analysis that includes factors such as compliance and transparency. When deciding whether or not to utilize AI internally or in its own products, the Company works closely with divisions including legal affairs, privacy, security, and intellectual property to evaluate risks from specialized perspectives before making a holistic decision on whether or not to proceed.

These AI risk assessment perspectives are clearly outlined in the AI Governance Guidelines, which provide easy-to-understand criteria and cautionary notes to help employees make informed and autonomous decisions about AI use. This approach is designed to ensure that responsible AI utilization is practiced at the individual level, even in initiatives driven by front-line teams.

By making a multi-faceted assessment of both AI-specific risks and the more general risks associated with traditional information systems, LY Corporation supports responsible AI use and ongoing risk management.

Monitoring System Led by the AI Ethics Governance Division

The AI Ethics Governance Department serves as the contact point to conduct risk assessments based on AI ethics and usage standards. Additionally, project information is shared with departments such as legal and intellectual property, privacy, security, as well as other relevant divisions to conduct risk judgements from specialized fields. The business and service divisions receive advice and decisions that take risks into account.

Employee Education

LY Corporation requires all officers and employees* to undergo mandatory training to enhance awareness of the risks associated with the use of generative AI—such as information leakage, rights infringement, privacy violations, and hallucinations—and to promote preventive decision-making and actions to mitigate the materialization of these risks. This training consists of e-learning and tests, and it also covers techniques for crafting prompts to improve the quality of generative AI outputs. The training content is regularly reviewed in response to social conditions and advancements in AI technology, and all officers and employees undergo the training approximately once every six months.
*Includes officers, permanent employees, fixed-term employees, contract employees, temporary staff, part-time employees, and subcontract employees. 

- Training completion rate for the first half of FY2024: 97%

The diagram illustrates the process in which employees take the e-learning for generative AI and begin using the AI assistant upon passing the tests. Subjects covered: major risks such as infomation leakage, violation of rights, inaccurate output, discriminatory output, and privacy. Prompts such as how to improve output quality (good and bad examples of prompts, sample templates).

Major Risks​ Information leakage, violation of rights, inaccurate output, discriminatory output, privacy​
Prompts How to improve output quality (Good and bad examples of prompts, sample templates)​

To further promote the active use of AI, LY Corporation is also providing targeted training in FY2025 for employees who are using or considering the use of generative AI to deliver services or create content. The training covers risks associated with business use of generative AI and their mitigation measures, as well as an overview of relevant overseas regulations that may apply.

Agile Governance Measures

AI technology is recently evolving at a rapid pace, particularly around generative AI. The environment is also undergoing swift changes with major tech companies and new enterprises making significant strides, as well as the development of regulatory frameworks both in Japan and abroad.

Under such circumstances, LY Corporation is creating a flexible governance mechanism that is not restricted by standardized operations and can accommodate these environmental changes.

In the center, there is a blue five-layer pyramid with the words "Agile Update of Internal Rules" written on it. From each layer of the pyramid, white lines extend to the right, labeled from top to bottom as "Basic Policy on AI Ethics," "Basic Regulations on AI Governance," "AI Governance Guidelines," "Notes, precautions, etc.," and "Rules by fields & Technologies. "On the left, there is a box labeled "Person responsible for AI Governance" and "AI Ethics Governance Division," above which is a rectangle containing the words "Top Management Committee/Board of Directors," "Expert Panel on AI Ethics," and "Relevant departments." Further to the left outer side, circles labeled "New Technologies/Changes in Social Conditions" are placed. On the right side, elements of "Users" and "Employees" are lined up, and for each, "Services," "Internal Systems," and "Educational Content" are offered. As a whole, considering new technologies and changes in social conditions, the AI Ethics Governance division takes the lead in progressively updating internal rules and reflecting these updates into employee training and service provision systems.

When new technologies emerge or when there are changes in regulations or social conditions, the AI ethics governance division takes the lead in working closely with relevant departments and product development teams to swiftly implement a variety of governance measures.

To keep pace with the rapidly evolving AI landscape, the Company has adopted an agile approach to internal standards, including guidelines—treating them not as fixed documents but as resources subject to continuous review and revision. Revisions are made promptly as needed, based on internal feedback, operational challenges, and advice from external experts, and are shared across the Company.

In addition, services and internal systems that use generative AI are developed and operated in accordance with internal rules that reflect the latest technologies and social trends. Training content is also regularly updated to incorporate current developments, helping employees continuously enhance their knowledge and ethical awareness.

Through this agile governance framework, the Company is able to actively promote the use of AI while also ensuring responsible practices in response to both technological advancement and societal expectations.

Applications of Generative AI in Various Services

LY Corporation offers various features leveraging generative AI in services such as LINE and Yahoo! JAPAN.

Application in Yahoo! JAPAN Search

In executing the growth strategy for FY2024 and beyond, which focuses on reinforcing media and search domains based on ID linkage, Yahoo! JAPAN Search implements improvements by releasing features that enhance convenience using generative AI, based on the diverse needs of users.

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Application in LINE app

The communication app "LINE" offers "LINE AI," a service that allows users to ask questions, gather information, and generate images for free, just like chatting with a friend, utilizing APIs such as those from OpenAI. By connecting users with generative AI, LINE aims to enhance communication richness and evolve into an even more convenient communication app.

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Application in Yahoo! JAPAN Shopping

In April 2024, "Yahoo! JAPAN Shopping" established a specialized team called the "Generative AI Tackle Office" within the organization. This team actively provides features that enable users to shop more conveniently and at a better value.

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Use of AI for Monitoring Non-Compliant Content

At LY Corporation, monitoring for non-compliant posts is conducted through a combination of AI and human review by a dedicated team, while respecting users’ freedom of expression.

A diagram showing the flow of content review and deletion. Posts are first subjected to "AI assessment", then proceed to "Review by human eyes." Review by human eyes consist of two types: "Patrol rounds" and "violation reports from users." If deletion criteria are confirmed there, the post moves to "Delete post based on removal decision" and is deleted. If no deletion criteria are confirmed, it results in "No elements requiring deletion were identified," and the post remains. "AI assessment" and "Review by human eyes" work together interactively, and deletion decisions are generally made after passing through both steps.
Source: LY Corporation Media Transparency Report (FY2024)

Yahoo! JAPAN Knowledge Search, Yahoo! JAPAN Finance Bulletin Boards, and Yahoo! JAPAN News Comments Section

The Company has implemented a machine learning system that utilizes resources such as its proprietary deep learning supercomputer, enabling the swift detection of posts that violate the prohibitions. While specific applications vary by service, the system estimates the likelihood that a post violates the prohibitions. If there is a possibility of a violation, the post will be automatically removed or prioritized for review by the dedicated team.

LINE OpenChat and LINE VOOM (Patrol System)

AI is employed to automatically assess the risk of user-generated content such as text, images, and videos violating the Company’s posting guidelines. This AI is a violation detection system optimized for LY Corporation's services, creating an environment where user posts can be reviewed appropriately.

Number of posts made in FY2024

Yahoo! JAPAN Knowledge Search 66,199,309
Yahoo! JAPAN Finance 29,415,652
Yahoo! JAPAN News Comments Section 113,995,832
LINE OpenChat 5,514,828,787
LINE VOOM 403,331,897

- AI, etc. is utilized for purposes such as automatic removal and assisting human reviewers in making removal decisions.

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Utilization of AI in Ad Reviews

By combining AI-powered systems with human eyes, LY Corporation conducts ad reviews around the clock, year-round, aiming to quickly deliver quality ads that align with user intent.

A diagram showing the timing of advertisement review. At the top, there are five stages connected by arrows arranged in a row: "Before submission → Submission → Before posting → While posting → After posting." At the bottom, the review system is illustrated with icons of a robot labeled "System" and a person labeled "Human eyes," indicating that both types of reviews are combined.
Source: Transparency Report on Advertising Service Quality

Number of disapprovals made in Yahoo! JAPAN Ads (FY2024)

Accounts 10,364
Ad creatives 197,910,220

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Use of AI in Monitoring LINE Official Accounts

To swiftly and reliably detect and remove problematic content, LY Corporation combines AI-based systems with human eyes to conduct around the clock, year-round monitoring.

A diagram showing the process by which posts are judged by AI. Decisions are made after passing through Automated verification and Review by human eyes. If no violation is found, no action is taken; if violations are found, the post is revomed or the account is suspended. In some cases, decisions may be made solely based on automated verification.
Source: Transparency Report on LINE Official Account Quality

Account suspensions and content removals (second half of 2024)

Number of suspended accounts 137,813
Number of content removals 27,626

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Measures to Mitigate GHG Emissions from the Use of Generative AI

As the use of generative AI and advanced technologies expands, the volume of data processing is rapidly increasing, raising new risks of greenhouse gas (GHG) emissions. In response to this challenge, the LY Corporation Group is committed to achieving carbon neutrality in its business activities by FY2030, aiming to reduce GHG for Scope 1 (direct emissions) and Scope 2 (indirect emissions) to net zero through the procurement of electricity derived from renewable energy with additionality, among other measures. Furthermore, the Group is also targeting "net zero" for total emissions, including Scope 3 (other indirect emissions) related to suppliers and the supply chain, by FY2050, in line with its Basic Policy on AI Ethics of realizing a peaceful and sustainable society.

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