Kakao to dole out compensation to businesses that suffered due to data center fire

Members of Kakao's consultative group for user compensation plan, which includes Song Ji-hye, fourth from left, head of KakaoTalk business at Kakao [KAKAO]

Kakao will hand out 30,000 won ($23.70) to 50,000 won of compensation to individual businesses that reported revenue losses after a 127-hour service breakdown in October.

Kakao, which runs the KakaoTalk messenger app, announced its user compensation plan on Thursday.

The plan includes doling out three emoji packages as general compensation for all of its messenger users. The emoji packages will be provided starting Jan. 5 through the KakaoTalk app. Users will be able to permanently use one of the three emoji packages, and the other two for 90 days.

Kakao also plans to provide additional compensation for users in the form of coupons, some of which will have limited availability, that can be used on its services.

Business owners who reported revenue losses of less than 300,000 won will be given 30,000 won, and 50,000 won when the loss reported was below 500,000 won.

Those who reported revenue losses exceeding 500,000 won may receive additional compensation after a review process, according to Kakao.

The company added that it will open a damage report channel for business owners for an additional two weeks, but did not reveal any specific dates.

Other Kakao companies, such as Kakao Mobility, Kakao Entertainment and Kakao Games have already been handing out compensation.

Major Kakao services, including Kakao Talk, Kakao T and Kakao Bank, went down on Oct. 15 due to a fire at an SK C&C data center in Pangyo.

It took five days for services to be fully restored, making daily communication near impossible for many, and forcing a temporary halt to businesses running on the apps and some financial activities.

KakaoTalk has an overwhelming dominance in the local messenger market, with a 95.8 percent share in terms of usage time, according to WiseApp.

The messenger app had more than 40 million active daily users as of October. Korea's total population is 52 million.

A total of 105,116 damage reports were made from Oct. 19 to Nov. 6, with 17 percent of them related to paid services.

After the service meltdown, Kakao established a consultative group for a user compensation plan.

The consultative group of six members consists of representatives from The Korea Federation of Micro Enterprise, Korea Startup Forum, and The Voice for Consumers and a legal expert in consumer protection, as well as Song Ji-hye, head of KakaoTalk business at Kakao.

On Dec. 6, the Ministry of Science and ICT gave Kakao a month to come up with a plan to set up a data redundancy system, a disaster plan, and a user compensation plan.

Kakao said on Dec. 7 that it will triple its budget for service stabilization over the next five years.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]