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HomeTechnologyKakao outage in South Korea prompts safety, monopoly issues

Kakao outage in South Korea prompts safety, monopoly issues

SEOUL — In South Korea, Kakao is ubiquitous. Practically everybody, from schoolchildren to the aged, makes use of the Korean tech firm’s apps for messaging, taxis, navigation and funds. It’s Fb Messenger, WhatsApp, Uber, Google Maps and Venmo wrapped into one.

So when a fireplace broke out this weekend on the constructing the place the corporate’s servers are run, disabling its apps, individuals joked that the nation would shut down.

However the outage compelled a critical reckoning over safety and monopoly issues in Korea, the place a handful of large conglomerates maintain dominance over the nation’s economic system. (Hyundai, recognized for its vehicles in america, operates residence complexes and shops right here; Samsung, the expertise large, additionally sells insurance coverage and owns a high-end clothes firm.)

Kakao stated in a presentation to traders in August that its buyer base had grown to 53.3 million lively customers, with 47.5 million of these in South Korea — placing dominance in a rustic of greater than 51 million. Many shops settle for Kakao Pay, many of the taxis throughout the Seoul metropolitan space run on Kakao T, the corporate’s ride-hailing app, and associates, corporations and even the federal government use Kakao Discuss to trade messages.

It’s not unusual for web sites and apps to expertise outages — Amazon Net Providers, Slack, Fb, WhatsApp and Apple have all made headlines and panicked shoppers — however they normally final hours, not days, they usually don’t usually have an effect on so many components of individuals’s lives.

On Monday, as Kakao was nonetheless getting a few of its providers again on-line, President Yoon Suk-yeol stated his administration would examine whether or not Kakao had a monopoly in the marketplace. If that have been the case, with Kakao changing into “nationwide infrastructure,” Yoon stated, “then the state should take essential measures for the nice of the individuals.”

On Sunday, Yoon’s spokeswoman, Kim Eun-hye, stated the disruption “not solely damages individuals’s livelihoods, but in addition causes deadly issues to nationwide safety in case of emergency.” Resilience within the face of such incidents, Kim stated, “is a company accountability and a social promise.”

Kakao shares plunged 9.5 % on Monday morning earlier than closing practically 6 % decrease from Friday’s shut.

“Threat administration in Korea will not be a robust go well with of most corporations,” stated J.R. Reagan, an American cybersecurity adviser in South Korea who runs the consulting agency IdeaXplorer World. “They don’t like planning for issues that haven’t occurred but.”

Kakao’s first drawback, he stated, was that there didn’t look like backup mills to make up for the ability outage. Second, “you don’t put all of your servers in a single location — you unfold these out,” in order that one incident — like the fireplace — doesn’t trigger such a widespread and slow-to-fix outage, he stated. He added that U.S. tech corporations have “realized their classes” there.

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Kakao and SK Telecom, a conglomerate that runs Kakao’s servers, didn’t reply to requests for remark Monday. Kakao stated in a assertion Sunday that it had created an emergency response committee to deal with the incident. Some options, comparable to messaging and Kakao T, have been restored as of Sunday night, the assertion stated.

Hong Eun-taek, co-chief government of Kakao, stated within the assertion, “We sincerely apologize for the inconvenience brought on by this accident, and we’re presently doing our greatest to normalize the service.” He added that the corporate was working to stop related incidents from taking place once more and that it was getting ready a “compensation coverage” for these affected.

Tammy Lee, a scholar at Korea College, turned 21 on Sunday. “When the outage occurred a day earlier than, I began to get tremendous nervous,” Lee stated. In Korea, younger individuals usually use Kakao to ship birthday presents; the recipient will get a message and may select the colour or dimension of the merchandise and ensure the supply tackle.

“After I realized that I might not have the ability to obtain any items this yr, I used to be actually unhappy,” Lee instructed The Washington Put up on Monday (in a Kakao message). By the point the gifting characteristic got here again on-line Sunday evening, “only some individuals” who had texted her birthday messages had checked again in to ship a gift, she stated.

“I believe the previous few days present why Kakao’s dominance could be a risk, however truthfully I don’t suppose some other ‘competitor’ will change Kakao at this level as a result of it’s SO deeply rooted in our lives,” she stated. “I can’t think about individuals abandoning an entire life model simply to maneuver on to a different utility.”

That didn’t cease rivals from attempting to benefit from the second. Line, a messaging app run by web large Naver — Korea’s model of Google — promoted its reliability. Line, Uber and the messaging app Telegram rose to the highest of the App Retailer charts in Korea. Telegram taunted Kakao on Twitter, saying, “We welcome our new Korean customers and hope they may benefit from the stability of Telegram’s a number of knowledge heart infrastructure.”

Hwang Lee, director of the Innovation, Competitors and Regulation Regulation Middle at Korea College, stated Kakao could be referred to as monopolistic “in a plain sense,” however he wouldn’t go as far as declaring it a monopoly in regard to antitrust enforcement.

Korea’s Truthful Commerce Fee “has stored an in depth eye on Kakao and different monopolistic digital platforms for a very long time,” Lee stated. However “their environment friendly providers have survived authorities rules thus far” as the federal government weighs the professionals and cons of the well-integrated platform, he stated.

Nonetheless, the outage was a wake-up name for Koreans, Lee stated. “They realized the potential risks of a platform monopoly, which have been neglected.”



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