By
Godfrey Benjamin
February 22nd, 2023
The major outage at the Kakao data center has triggered worrisome comments from many, including South Korea’s president Yoon Suk-yeol.
Shares of South Korea’s Kakao declined on Monday amid calls for antitrust scrutiny after a major outage over the weekend. Kakao Corp lost over 9% earlier today as pressures mount for antitrust scrutiny. As the nation’s largest mobile chat app, the outage starred great concerns and a sharp political backlash. In addition to being South Korea’s primary messaging app for over 53 million users globally, Kakao is also used for other services like online payments, and that’s why the outage shook the entire country.
From being the top messaging app in South Korea to a tool for online payments, gaming, and ride-hailing, major websites rely on Kakao for login verification. Unfortunately, the company has been unable to continue its operations due to a fire incident. The Kakao team took to Twitter on the 15th of October to announce the cause of the outage. An English translation of the tweet says:
“There is a problem, that Kakao services, including Kakao Talk, are not running smoothly because of a fire in the data center from around 3:30 pm today. We will do our best for a quick recovery. We are very sorry for the inconvenience.”
Outage Sparks Calls for Antitrust Scrutiny for Kakao Corp
Unfortunately, the data center where the fire happened also hosts servers for some major tech companies in Korea. The major outage at the Kakao data center has triggered worrisome comments from many, including South Korea’s president Yoon Suk-yeol. The president referred to the impact of the sudden service interruption as “no different from the national communication network.”
Currently, millions of people are at a disadvantage following the KakaoTalk outage. The company revealed that it had 47.5 million monthly active users in Korea during Q2. Meanwhile, the entire population of South Korea as of the 1st of November. 2021 is 51.74 million. This means that Kakao services over 90% of the nation’s population.
The outage shed more light on the solid position that KakaoTalk holds in South Korea. As a result, president Yoon stated:
“If there is a monopoly or oligopoly situation where it manipulates the market, we need to take systematic measures from a nationwide level for the interest of the people.”
As Kakao Corp plunged in earlier hours, its subsidiaries also followed the pattern. Kakao Bank, Kakao Games, and Kakao Pay all declined by over 7% in the trading session in Korea.
Kakao has released a statement to address the outage. The company apologized for the service interruption and assured users that the team was working to restore normalcy. It also promised to “thoroughly investigate the cause of this incident and take the best possible measures to prevent recurrence.”
To avoid similar challenges in case of another outage, Kakao plans to strengthen “various technological recurrence prevention measures so that inconveniences can be minimized and the service can be used as usual quickly.”
