Kakao outage in South Korea prompts security, monopoly concerns

SEOUL — In South Korea, Kakao is ubiquitous. Just about everybody, from schoolchildren to the aged, uses the Korean tech company’s applications for messaging, taxis, navigation and payments. It is Facebook Messenger, WhatsApp, Uber, Google Maps and Venmo wrapped into one particular.

So when a fire broke out this weekend at the constructing wherever the company’s servers are run, disabling its applications, individuals joked that the region would shut down.

But the outage compelled a major reckoning in excess of safety and monopoly issues in Korea, wherever a handful of big conglomerates maintain dominance around the country’s economic system. (Hyundai, recognized for its vehicles in the United States, operates apartment complexes and department retailers in this article Samsung, the technologies giant, also sells insurance coverage and owns a higher-stop apparel organization.)

Kakao stated in a presentation to investors in August that its customer foundation had developed to 53.3 million active end users, with 47.5 million of all those in South Korea — placing dominance in a region of much more than 51 million. Several suppliers take Kakao Pay, most of the taxis across the Seoul metropolitan place operate on Kakao T, the company’s ride-hailing application, and good friends, businesses and even the authorities use Kakao Speak to trade messages.

It is not unheard of for internet websites and apps to knowledge outages — Amazon Website Services, Slack, Fb, WhatsApp and Apple have all created headlines and panicked individuals — but they normally previous hrs, not times, and they never typically affect so a lot of sections of people’s life.

On Monday, as Kakao was still getting some of its companies back on the web, President Yoon Suk-yeol said his administration would examine whether Kakao experienced a monopoly on the market. If that had been the scenario, with Kakao getting “nationwide infrastructure,” Yoon stated, “then the point out ought to choose necessary measures for the excellent of the folks.”

On Sunday, Yoon’s spokeswoman, Kim Eun-hye, said the disruption “not only damages people’s livelihoods, but also results in fatal issues to national safety in case of emergency.” Resilience in the face of such incidents, Kim said, “is a corporate obligation and a social promise.”

Kakao shares plunged 9.5 p.c on Monday early morning before closing approximately 6 p.c lower from Friday’s shut.

“Risk administration in Korea is not a powerful match of most corporations,” reported J.R. Reagan, an American cybersecurity adviser in South Korea who operates the consulting business IdeaXplorer International. “They never like setting up for things that have not took place nevertheless.”

Kakao’s first trouble, he reported, was that there did not seem to be backup turbines to make up for the electric power outage. 2nd, “you don’t place all your servers in one site — you distribute those people out,” so that one particular incident — like the fire — doesn’t cause this sort of a prevalent and gradual-to-take care of outage, he said. He included that U.S. tech firms have “learned their lessons” there.

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Kakao and SK Telecom, a conglomerate that runs Kakao’s servers, did not respond to requests for comment Monday. Kakao stated in a assertion Sunday that it experienced established an crisis response committee to tackle the incident. Some attributes, these kinds of as messaging and Kakao T, had been restored as of Sunday night, the statement explained.

Hong Eun-taek, co-chief government of Kakao, stated in the assertion, “We sincerely apologize for the inconvenience caused by this accident, and we are at present performing our finest to normalize the service.” He additional that the corporation was doing work to protect against equivalent incidents from taking place once more and that it was getting ready a “compensation policy” for these impacted.

Tammy Lee, a college student at Korea University, turned 21 on Sunday. “When the outage took place a day ahead of, I begun to get super anxious,” Lee said. In Korea, youthful persons usually use Kakao to send out birthday presents the receiver will get a information and can decide on the shade or dimension of the item and verify the shipping and delivery address.

“When I understood that I would not be capable to obtain any gifts this 12 months, I was seriously unfortunate,” Lee told The Washington Put up on Monday (in a Kakao information). By the time the gifting characteristic came back again online Sunday evening, “only a number of people” who had texted her birthday messages experienced checked back in to ship a existing, she stated.

“I imagine the previous several times clearly show why Kakao’s dominance can be a danger, but actually I don’t believe any other ‘competitor’ will replace Kakao at this point for the reason that it’s SO deeply rooted in our life,” she claimed. “I can’t envision folks abandoning a whole lifestyle fashion just to shift on to another software.”

That didn’t halt opponents from striving to choose gain of the second. Line, a messaging app run by web giant Naver — Korea’s edition of Google — promoted its dependability. Line, Uber and the messaging application Telegram rose to the top of the App Retail outlet charts in Korea. Telegram taunted Kakao on Twitter, saying, “We welcome our new Korean end users and hope they will take pleasure in the stability of Telegram’s many data heart infrastructure.”

Hwang Lee, director of the Innovation, Competitors and Regulation Law Centre at Korea College, reported Kakao can be termed monopolistic “in a basic perception,” but he would not go so significantly as declaring it a monopoly in regard to antitrust enforcement.

Korea’s Truthful Trade Commission “has kept a close eye on Kakao and other monopolistic electronic platforms for a extended time,” Lee explained. But “their efficient services have survived govt polices so far” as the authorities weighs the execs and negatives of the effectively-integrated system, he claimed.

Continue to, the outage was a wake-up simply call for Koreans, Lee claimed. “They understood the possible potential risks of a platform monopoly, which have been overlooked.”

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