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Kakao Mobility, key execs indicted for fair trade violations over blocking rival ride requests

Published: 26 Jan. 2026, 19:04

The Kakao T logo is seen on a taxi parked near Seoul Station in central Seoul on May 28, 2025. [NEWS1]

Prosecutors on Monday indicted Kakao Mobility, its chief executive and other executives on charges of violating fair trade laws over allegations that the company blocked taxi ride requests to pressure rival franchise operators.

The Seoul Southern District Prosecutors’ Office said it indicted CEO Ryu Geung-seon, a vice president and a business division head without detention. Prosecutors also indicted the company as a corporate entity under a joint punishment provision that allows courts to penalize both individuals and companies for illegal conduct.

Prosecutors said the executives sought to expand Kakao Mobility’s share of the affiliated taxi market by demanding that rival franchise operators sign partnership agreements under the guise of improving service quality on taxi-hailing app Kakao T.

When competitors refused, the company allegedly blocked the allocation of ride-hailing calls to drivers affiliated with those operators.

The investigation found that between November 2019 and November 2020, Kakao executives reviewed plans to block general ride-hailing calls for drivers affiliated with rival franchises but decided not to carry them out at the time, citing a high risk of violating fair trade laws.

But Kakao Mobility reversed its stance in December 2020 as competition intensified and implemented the measures, according to prosecutors. The company allegedly suspended general call services and other functions for 14,042 driver accounts linked to a different company and 1,095 accounts linked to a third company after the firms rejected partnership demands.

Following the move, the number of drivers switching from the two rival operators to Kakao Mobility rose sharply. Kakao Mobility’s share of the midsize taxi franchise call market increased to 79 percent in December 2022 from 55 percent in March 2021.

By contrast, drivers affiliated with smaller rival franchises saw their earnings decline, and some franchise operators shut down their businesses, resulting in significant damage, prosecutors said.

The Kakao T logo is seen on a taxi parked near Seoul Station in Jung District, central Seoul, on May 28, 2025. [NEWS1]

Prosecutors cleared Kakao Mobility of other allegations, including claims of preferential call allocation referred by the Fair Trade Commission in December 2023 and accusations of inflated sales reported by the Financial Services Commission in November 2024, saying they could not establish criminal liability.

“We will continue to respond strictly, in accordance with the law and principles, to fair trade crimes that undermine market competition and harm people’s livelihoods and the national economy,” a prosecution official said.

Kakao Mobility denied the charges, saying “this matter involved legitimate consultations aimed at preventing service quality deterioration and free-riding issues that arise in platform operations.” The company added that “there was no intent or action to restrict competition.”

Kakao Mobility said related administrative litigation is underway and that it would “faithfully explain the facts in the criminal proceedings,” adding it would “continue to operate the platform in a fair and transparent manner.”

Kakao T is the country's largest taxi-hailing app, with an estimated market share of 94 percent as of last July, according to market tracker Wiseapp Retail Goods.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JEONG JAE-HONG [[email protected]]