Massive Kakao outage prompts S. Korea to ponder over-reliance on tech giant’s apps

Kakao is ubiquitous in South Korea, with a superapp-like ecosystem offering services ranging from online shopping, banking to identity verification.

Chang May Choon

Chang May Choon

The Straits Times


Kakao is ubiquitous in hyperconnected South Korea, with a superapp-like ecosystem of apps. PHOTO: REUTERS

October 25, 2022

SEOUL – On the day a fire disrupted most of the services provided by South Korean tech giant Kakao, Ms Monica Kim’s mobile phone fell deathly silent.

She received none of the usual text messages from friends and co-workers via the country’s most popular messaging platform KakaoTalk.

The 34-year-old was unable to call a taxi like she always did via the ride-hailing app Kakao T and had to take public transport instead. She also failed to buy a birthday present for a friend on Kakao Gifts, which stopped functioning.

Services were restored partially only 10 hours after Kakao’s main data centre, located just outside of Seoul, caught fire on Oct 15. The company took four days to repair servers and finally normalise operations in its worst service outage since its founding in 2010.

“It made me realise that I had become so reliant on Kakao in almost every aspect of my life,” Ms Kim, an interpreter, told The Straits Times, echoing a view that arose among many people in the aftermath.

“I didn’t really see that as a problem before… but now I do feel a little less safe entrusting so much of my information with their company. I would more likely look for alternatives in the future.”

Kakao is ubiquitous in hyperconnected South Korea, with a superapp-like ecosystem of apps and functions offering services that range from text messaging to online shopping, banking, online gaming, webtoons, and even verification of identity.

KakaoTalk is the main mode of communication for over 80 per cent of South Korea’s 50 million population. Kakao T is the preferred mode of calling for taxis, while Kakao Pay is one of the most popular mobile payment systems.

So when the company’s servers failed, millions of people were left stranded without access to apps that they have become so reliant on, while thousands of businesses that rely on Kakao to connect with customers were inconvenienced.

The incident, which exposed Kakao’s lack of backup servers and ability to cope with emergencies, has met with public backlash and politicians calling for the firm to be held responsible for the unprecedented service disruption.

Lawmaker Park Hong-geun of the main opposition Democratic Party accused the company of failing to install backup servers “in order to cut costs”.

Mr Kang Min-kuk, a lawmaker with the ruling People Power Party (PPP), lashed out at Kakao for being so profit-driven that it “couldn’t be bothered to give any thought to system operations”.

Noting that KakaoTalk generated a whopping 2.55 trillion won in advertising revenue from January last year to June this year, he also urged the government to tighten rules to “keep (Kakao’s) greed in check”.

Questions have also been asked about Kakao’s near monopolistic reach, with South Korean President Yoon Suk-yeol saying that the Fair Trade Commission is looking into the matter.

If a free market economy is “distorted by a monopoly or serious oligopoly, and if that forms something as big as a country’s basic infrastructure, I think the state should certainly take the necessary institutional steps in the interest of the people,” he said last Monday.

Kakao’s co-CEO Namkoong Whon has apologised and resigned to take responsibility for the incident.

The PPP has said it will push for laws to strengthen the government’s role in overseeing data centres and to require communications companies to build backup servers in different locations to prevent another major disruption.

KakaoTalk has since lost some 2 million users to alternatives such as Telegram and Naver Line, but it still remains the default communications tool for most people.

Ms Kang Soo-yeon, 30, said it is too difficult to quit KakaoTalk because all her friends and co-workers use the same app.

“It’s too deeply rooted in our lives. I can’t change unless everyone changes along with me,” added the sales manager.

Interpreter Ms Kim admitted that the recent outage has affected her impression of the Kakao brand, but hopes that it can emerge from the saga as a more responsible company.

“With this incident, Kakao has lost some of the trust (people have in them) and they would need to work harder to recover it,” she said.

“They should feel the weight of social responsibility considering the status they have achieved – they’re no longer just a tiny startup any more.”

But she would still stick with KakaoTalk, she said. “I can’t move to another messenger because Kakao’s stickers are so good. Conversations are not the same without them.”

scroll to top