Businesses demand compensation from Kakao, some lawyers skeptical

Industry

Published: 17 Oct. 2022, 16:48

Businesses demand compensation from Kakao, some lawyers skeptical

Kakao T was out of service over the weekend after a data center in the SK C&C building in Pangyo, Gyeonggi, caught fire on Saturday. [NEWS1]

Businesses are demanding compensation for earnings lost due to the Kakao blackout.

Kakao servers were knocked out as a result of a fire at a Pangyo data center that started Saturday afternoon. The company's messenger and services offered by related companies were unavailable, degraded or intermittent anywhere from 10 hours to 2 days as backup systems failed to kick in fast enough.

Drivers relying on Kakao T, a taxi-hailing app, for customers found it impossible to connect with fares.

A 61-year-old driver living in Songpa District, southern Seoul, said he couldn't get work at all on Saturday.

“I was just 10 points away from reaching the purple level, but I wasn't able to do so,” he said, referring to a scoring system for some types of drivers. “I should have worked more the day before.”

Under a system in place for some types of drivers, those at higher color-coded tiers can receive more calls or be able to receive calls from customers in a certain area.

“Many drivers suffered damages,” said a spokesperson for the Korea National Joint Conference of Taxi Association.

“Kakao T Venti drivers were not able to take any customers, so their loss would be really big," the spokesperson said referring to the service for large vehicles.

Self-employed who use Kakao Talk to receive bookings shared how they were not able to get customers over the weekend.

“There is a reservation placed for tomorrow, but it is hard to reach the customer,” said a skincare specialist who operates booking services through Kakao Talk on Sunday.

Small business owners shared different experiences online with comments such as “I can’t make customized cakes which have been already placed on order,” and “booking details cannot be accessed.”

Webtoon and web novel writers that release their pieces on Kakao Webtoon and KakaoPage are also claiming losses. Companies that sell and advertise their products through Kakao Talk Gift are also claiming damages.

“It was a life-threatening incident. Why isn't Kakao offering compensation?” read a comment on an online community for drivers.

A comment on an online community for investors read, “shouldn't SK C&C pay damages?”

Experts in law say compensation will depend on whether the cause of the crash is seen as Kakao’s fault or not. Whether the service is paid or not is another significant factor to be considered.

“It would be difficult to ask for compensation from Kakao for losses that resulted from not being able to access a free service,” said Um Tae-seob, partner at OhKims Law. “The court normally does not accept compensation claims for these kinds of special damages that are hard to predict.”

Compensation may be possible even though losses are related to free services.

“Compensation for damages and losses should be made Kakao is found to be at fault, for example, due to lack of countermeasures," said Ja Jong-Sun, a lawyer at Naru Law Office.

“Even though it’s a free service, Kakao profits when users use the service, so it is not entirely impossible to ask for compensation if the company’s fault is accepted.”

BY LEE BYUNG-JUN [cho.jungwoo1@joongang.co.kr]