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South Korea’s antitrust authority, the Fair Trade Commission (FTC), will increase scrutiny of acquisitions for different businesses in the platform industry to crack down on monopolies in the sector, as reported by the Korea Economic Daily on October 21. The supervision came after South Korea’s dominant mobile messaging app KakaoTalk suffered its worst server outage due to a fire on October 15, which triggered public anger and concerns over the risks brought by Kakao’s [035720:KS] monopoly. The FTC plans to draw up its online platform monopoly review guidelines this year to impose stricter standards on the abuse of monopoly power in the platform sector. The guidelines will include criteria on market definition and market dominance considering the nature of the online platform industry.
The monopolization of online platforms indirectly caused the Kakao crisis, as the company failed to manage risks properly in a monopoly with low competition pressure, according to FTC Chairperson Han Ki-Jeong. South Korean President Yoon Suk-yeol also expressed concerns about the Kakao crisis, stating that necessary institutional steps must be taken for the interest of the people if a free-market economy is distorted by a monopoly or serious oligopoly. In response, Kakao co-CEO Namkoong Whon apologized and resigned to take responsibility for the outage. In addition, the company pledged to investigate the reason for the slow recovery work, review compensation for users and businesses affected by server outages, and install backup servers in case of emergencies.
Sources:
https://www.kedglobal.com/tech,-media-telecom/newsView/ked202210210014
