SEOUL—Uber Technologies Inc. faces a new legal headache after South Korea’s communications watchdog said it would ask prosecutors to punish the local unit of the California-based ride-hailing service for violating communications laws.

The Korea Communications Commission said in a statement that Uber Korea violated local laws by failing to report its Web-based location service to the regulator. Violators face up to three years in prison or a fine of 30 million won ($27,700), the statement said. The commission will file a formal complaint with prosecutors later this week, officials said.

Uber Korea had no immediate comment, its public-relations representative, Insight Communications, said.

The regulator’s move came one month after Korean prosecutors separately indicted Uber Chief Executive Officer Travis Kalanick, his Korean business unit and his Korean car-rental partner MK Korea for violating a public-transport law.

Korean transport law bans individuals or car-rental firms from providing or facilitating taxi service without state licenses. Uber isn’t licensed to do taxi business in Korea and has sparked protests from local cabdrivers.