Kakao Faces Class Action Suit As It Loses 2 Million Users Resulting from Service Disruption
Kakao is now dealing with severe backlash following the disruption of Kakao Talk service for more than 10 hours on October 15 due to a fire at an SK C&C data center in Seongnam, Gyeonggi Province.
Kakao’s business disruption caused a halt in critical services, affecting financial, commerce, mobility, music streaming, social networking, email, and blogging activities. Netizens have commented on the impact of what this disruption caused.
Believe it or not, South Korea's central bank even announces its interest-rate decisions via a Kakaotalk chatroom. I don't know how we've come to rely on the messaging app of a single private company so unquestioningly for just about every kind of communication. https://t.co/ua4nTDqm1Z
— Sam Kim | 김혜성 (@samkimasia) October 15, 2022
Several frustrated users have been preparing a class action suit for financial damages caused by the service disruption amid a clamor for a probe into Kakao’s current monopolistic status. The disruption of its services impacted negatively on some of its users who chose to sign up with other service providers.
Based on data from Wiseapp, a real-time data analysis service provider, Kakao Talk users were estimated at 39.05 million on Sunday, down by 2.07 million from its Friday total, which was at 41.12 million. The country’s most popular messaging app lost this many users in the wake of its most extended outage since its launch in 2010, while its rivals LINE and Telegram significantly gained users.
LINE, a subsidiary of South Korea’s dominant search engine Naver Corporation, tripled its users from 430,000 on Friday to 1.28 million on Sunday. Web portal Naver was seen promoting LINE on its mobile homepage with the caption, “When you need to make an urgent contact.”
Telegram, a cloud-based instant messaging app, also saw a surge in its users to 1.28 million on Sunday, up from 1.06 million Friday.
President Yoon Suk Yeol commented on the issue, detailing to reporters the government’s next response in light of the public’s dependence on the infrastructure provided by a single market player.
The government should outline an institutional framework for the public good. It is nothing short of a failure of critical national infrastructure. The Kakao platform is operated by a private market player, but to most of the public, it is essentially a public communication channel.
— President Yoon Suk Yeol
The President added that critical systems would be put in place to prevent the recurrence of accidents, and similar incidents would be countered immediately, including the recovery of servers and data as overseen by the Minister of Science and ICT.
Also, due to Kakao’s service disruption, the Fair Trade Commission (FTC) is fine-tuning a regulation wherein online platform operators will be penalized for abusing their market dominance.
Meanwhile, Kakao said vital functions of its mailing services are almost fully-restored, including music, in-car GPS navigation, and gaming services. A Kakao official assures that they have been monitoring to ensure quick response to service delays.
Some other services will be provided as soon as data recovery is completed. The speed of each data varies due to the complexity and volume of information stored and the equipment needed. We will continue monitoring to ensure speedy responses to service delays and failures. Specific prevention measures will be rolled out soon.
— Kakao Official
