Measures needed to regulate platform behemoths
The breakdown of Kakao services has wreaked unprecedented havoc on Korean society and laid bare the problems with the online platform behemoth. It has disrupted payment, mobility and portal services as well as a messenger app that has some 43 million users. On Tuesday, Kakao Corp. said it normalized most of its operations and is offering services almost in full swing, except for a partially unavailable mailing service.
The service stoppage has raised the need to put gigantic platforms under better supervision. The presidential office has decided to set up a task force to tackle the devastating consequences that such disruptions will cause to the nation's communication infrastructure and even national security. President Yoon Suk-yeol has also vowed to take necessary measures to prevent a recurrence of such a mishap. "Although a network is operated by a private company, it is tantamount to a key national communication infrastructure," Yoon said in a brief meeting with the press.
Kakao cannot deflect criticism for having failed to carry out its responsibility as a platform giant with a far-reaching impact on the daily lives of people. For instance, KakaoTalk controls 90 percent of the domestic messenger market, while Kakao Mobility dominates more than 80 percent of the nation's taxi-hailing services.
As of August, the number of Kakao's affiliates stood at 135 with their business areas ranging from shopping and banking to game and entertainment. Based on its market dominance, Kakao has sought to infiltrate into businesses run by small-sized proprietors such as flower delivery, beauty parlors and so on, instigating a fierce public outcry.
In the process of "greedy" expansion of business portfolios, the firm has triggered a series of controversies and a strong public backlash. Its employees have even protested its discriminatory compensation policy. Its management drew the rage of retail investors by rushing to sell off their shares one month after the firm was listed on the stock exchange. Kakao has neglected its duty to install systems to avert possible service disruptions. There have been growing calls to control risks arising from the monopolistic platform behemoth.
Policymakers and lawmakers are also to blame for having done little to nothing to put a proper regulatory system in place to oversee such dominant online service providers like Kakao. The previous Moon Jae-in administration sought to legislate a bill to hold those platform firms in check, but to no avail, due to their strong resistance. Given this, Yoon's pledge to regulate those firms is welcome, albeit belated.
The ruling People Power Party and the main opposition Democratic Party of Korea are also poised to present relevant bills. Such a move is necessary to prevent a recurrence of similar disruptions. What's worrisome, however, is to introduce excessive and hasty regulations that could stifle innovation. It is time for the authorities and businesses to think hard to work out steps to minimize the adverse impact of platform behemoths without suppressing their entrepreneurship and creative thinking.
The breakdown of Kakao services has wreaked unprecedented havoc on Korean society and laid bare the problems with the online platform behemoth. It has disrupted payment, mobility and portal services as well as a messenger app that has some 43 million users. On Tuesday, Kakao Corp. said it normalized most of its operations and is offering services almost in full swing, except for a partially unavailable mailing service.
The service stoppage has raised the need to put gigantic platforms under better supervision. The presidential office has decided to set up a task force to tackle the devastating consequences that such disruptions will cause to the nation's communication infrastructure and even national security. President Yoon Suk-yeol has also vowed to take necessary measures to prevent a recurrence of such a mishap. "Although a network is operated by a private company, it is tantamount to a key national communication infrastructure," Yoon said in a brief meeting with the press.
Kakao cannot deflect criticism for having failed to carry out its responsibility as a platform giant with a far-reaching impact on the daily lives of people. For instance, KakaoTalk controls 90 percent of the domestic messenger market, while Kakao Mobility dominates more than 80 percent of the nation's taxi-hailing services.
As of August, the number of Kakao's affiliates stood at 135 with their business areas ranging from shopping and banking to game and entertainment. Based on its market dominance, Kakao has sought to infiltrate into businesses run by small-sized proprietors such as flower delivery, beauty parlors and so on, instigating a fierce public outcry.
In the process of "greedy" expansion of business portfolios, the firm has triggered a series of controversies and a strong public backlash. Its employees have even protested its discriminatory compensation policy. Its management drew the rage of retail investors by rushing to sell off their shares one month after the firm was listed on the stock exchange. Kakao has neglected its duty to install systems to avert possible service disruptions. There have been growing calls to control risks arising from the monopolistic platform behemoth.
Policymakers and lawmakers are also to blame for having done little to nothing to put a proper regulatory system in place to oversee such dominant online service providers like Kakao. The previous Moon Jae-in administration sought to legislate a bill to hold those platform firms in check, but to no avail, due to their strong resistance. Given this, Yoon's pledge to regulate those firms is welcome, albeit belated.
The ruling People Power Party and the main opposition Democratic Party of Korea are also poised to present relevant bills. Such a move is necessary to prevent a recurrence of similar disruptions. What's worrisome, however, is to introduce excessive and hasty regulations that could stifle innovation. It is time for the authorities and businesses to think hard to work out steps to minimize the adverse impact of platform behemoths without suppressing their entrepreneurship and creative thinking.
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