Kakao outage in South Korea prompts security, monopoly concerns

Kakao outage in South Korea prompts security, monopoly concerns

SEOUL — In South Korea, Kakao is ubiquitous. Just about absolutely everyone, from schoolchildren to the elderly, makes use of the Korean tech company’s apps for messaging, taxis, navigation and payments. It’s Fb Messenger, WhatsApp, Uber, Google Maps and Venmo wrapped into a single.

So when a fireplace broke out this weekend at the developing where by the company’s servers are run, disabling its applications, folks joked that the region would shut down.

But the outage compelled a severe reckoning more than security and monopoly worries in Korea, in which a handful of large conglomerates maintain dominance more than the country’s overall economy. (Hyundai, recognized for its cars and trucks in the United States, operates condominium complexes and office stores listed here Samsung, the technological innovation large, also sells insurance plan and owns a higher-close clothing business.)

Kakao reported in a presentation to traders in August that its customer base had developed to 53.3 million active people, with 47.5 million of those people in South Korea — putting dominance in a region of much more than 51 million. Lots of shops acknowledge Kakao Pay, most of the taxis across the Seoul metropolitan area run on Kakao T, the company’s ride-hailing app, and good friends, corporations and even the governing administration use Kakao Discuss to trade messages.

It’s not unheard of for websites and apps to encounter outages — Amazon Net Solutions, Slack, Facebook, WhatsApp and Apple have all made headlines and panicked consumers — but they typically final hours, not times, and they never generally affect so many parts of people’s lives.

On Monday, as Kakao was even now receiving some of its companies back again on line, President Yoon Suk-yeol stated his administration would look into irrespective of whether Kakao experienced a monopoly on the industry. If that were the case, with Kakao turning into “nationwide infrastructure,” Yoon reported, “then the state should just take necessary steps for the excellent of the people.”

On Sunday, Yoon’s spokeswoman, Kim Eun-hye, said the disruption “not only damages people’s livelihoods, but also causes lethal difficulties to nationwide stability in scenario of emergency.” Resilience in the confront of this kind of incidents, Kim mentioned, “is a corporate duty and a social guarantee.”

Kakao shares plunged 9.5 p.c on Monday early morning ahead of closing just about 6 per cent decreased from Friday’s close.

“Risk management in Korea is not a sturdy accommodate of most corporations,” stated J.R. Reagan, an American cybersecurity adviser in South Korea who operates the consulting company IdeaXplorer World-wide. “They really don’t like arranging for points that have not took place still.”

Kakao’s initial issue, he stated, was that there did not appear to be backup turbines to make up for the electric power outage. Second, “you never put all your servers in just one site — you unfold individuals out,” so that one incident — like the fireplace — doesn’t cause this sort of a prevalent and sluggish-to-repair outage, he reported. He additional that U.S. tech businesses have “learned their lessons” there.

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Kakao and SK Telecom, a conglomerate that runs Kakao’s servers, did not reply to requests for remark Monday. Kakao explained in a assertion Sunday that it had created an crisis response committee to tackle the incident. Some options, such as messaging and Kakao T, have been restored as of Sunday night, the statement explained.

Hong Eun-taek, co-main govt of Kakao, stated in the assertion, “We sincerely apologize for the inconvenience induced by this accident, and we are at this time doing our greatest to normalize the provider.” He added that the company was functioning to reduce identical incidents from going on once more and that it was preparing a “compensation policy” for all those affected.

Tammy Lee, a pupil at Korea College, turned 21 on Sunday. “When the outage occurred a working day prior to, I started to get tremendous anxious,” Lee explained. In Korea, youthful people today often use Kakao to deliver birthday offers the recipient receives a message and can pick the shade or dimensions of the product and confirm the shipping and delivery tackle.

“When I realized that I would not be in a position to get any gifts this calendar year, I was truly unfortunate,” Lee explained to The Washington Submit on Monday (in a Kakao information). By the time the gifting function came back again online Sunday night time, “only a few people” who experienced texted her birthday messages experienced checked back in to send a present, she claimed.

“I imagine the past handful of days show why Kakao’s dominance can be a threat, but honestly I do not believe any other ‘competitor’ will substitute Kakao at this level because it is SO deeply rooted in our lives,” she explained. “I simply cannot envision people today abandoning a whole life style just to shift on to one more software.”

That didn’t cease competition from seeking to just take advantage of the moment. Line, a messaging app run by internet giant Naver — Korea’s version of Google — promoted its trustworthiness. Line, Uber and the messaging app Telegram rose to the major of the App Retail outlet charts in Korea. Telegram taunted Kakao on Twitter, saying, “We welcome our new Korean people and hope they will get pleasure from the balance of Telegram’s numerous facts center infrastructure.”

Hwang Lee, director of the Innovation, Competition and Regulation Law Heart at Korea University, reported Kakao can be identified as monopolistic “in a plain perception,” but he wouldn’t go so far as declaring it a monopoly in regard to antitrust enforcement.

Korea’s Truthful Trade Fee “has retained a near eye on Kakao and other monopolistic digital platforms for a extensive time,” Lee mentioned. But “their productive solutions have survived govt laws so far” as the authorities weighs the pros and negatives of the nicely-integrated platform, he said.

Even now, the outage was a wake-up phone for Koreans, Lee said. “They recognized the likely dangers of a platform monopoly, which have been neglected.”