Kakao outage in South Korea prompts security, monopoly concerns

Kakao outage in South Korea prompts security, monopoly concerns

SEOUL — In South Korea, Kakao is ubiquitous. Just about anyone, from schoolchildren to the elderly, utilizes the Korean tech company’s applications for messaging, taxis, navigation and payments. It is Facebook Messenger, WhatsApp, Uber, Google Maps and Venmo wrapped into a single.

So when a hearth broke out this weekend at the constructing exactly where the company’s servers are operate, disabling its apps, people today joked that the state would shut down.

But the outage compelled a serious reckoning about security and monopoly problems in Korea, in which a handful of big conglomerates hold dominance more than the country’s economic system. (Hyundai, regarded for its autos in the United States, operates apartment complexes and division shops listed here Samsung, the engineering giant, also sells coverage and owns a superior-stop apparel business.)

Kakao claimed in a presentation to traders in August that its purchaser foundation had grown to 53.3 million lively end users, with 47.5 million of individuals in South Korea — hanging dominance in a nation of far more than 51 million. Lots of stores take Kakao Fork out, most of the taxis across the Seoul metropolitan location run on Kakao T, the company’s trip-hailing application, and pals, companies and even the federal government use Kakao Discuss to exchange messages.

It is not uncommon for internet websites and apps to working experience outages — Amazon Web Products and services, Slack, Fb, WhatsApp and Apple have all manufactured headlines and panicked shoppers — but they normally final several hours, not days, and they do not generally have an effect on so lots of pieces of people’s life.

On Monday, as Kakao was nevertheless finding some of its expert services back on line, President Yoon Suk-yeol said his administration would examine no matter whether Kakao experienced a monopoly on the current market. If that were the situation, with Kakao becoming “nationwide infrastructure,” Yoon stated, “then the condition have to take required steps for the good of the men and women.”

On Sunday, Yoon’s spokeswoman, Kim Eun-hye, explained the disruption “not only damages people’s livelihoods, but also brings about deadly complications to national stability in scenario of emergency.” Resilience in the encounter of these kinds of incidents, Kim said, “is a company obligation and a social guarantee.”

Kakao shares plunged 9.5 p.c on Monday early morning before closing almost 6 per cent lower from Friday’s near.

“Risk management in Korea is not a powerful fit of most firms,” reported J.R. Reagan, an American cybersecurity adviser in South Korea who runs the consulting agency IdeaXplorer International. “They do not like organizing for issues that haven’t happened still.”

Kakao’s 1st difficulty, he explained, was that there did not appear to be backup generators to make up for the electric power outage. Second, “you do not set all your servers in 1 spot — you spread those people out,” so that a person incident — like the fire — does not trigger these a popular and gradual-to-fix outage, he stated. He added that U.S. tech corporations have “learned their lessons” there.

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Kakao and SK Telecom, a conglomerate that operates Kakao’s servers, did not react to requests for comment Monday. Kakao claimed in a statement Sunday that it experienced developed an crisis reaction committee to deal with the incident. Some functions, such as messaging and Kakao T, were restored as of Sunday evening, the statement explained.

Hong Eun-taek, co-chief executive of Kakao, said in the assertion, “We sincerely apologize for the inconvenience induced by this incident, and we are now doing our finest to normalize the assistance.” He included that the company was operating to reduce similar incidents from happening once more and that it was planning a “compensation policy” for those people afflicted.

Tammy Lee, a college student at Korea College, turned 21 on Sunday. “When the outage happened a day just before, I started out to get tremendous nervous,” Lee said. In Korea, young individuals normally use Kakao to mail birthday presents the recipient gets a concept and can decide on the shade or dimensions of the item and verify the shipping tackle.

“When I recognized that I would not be ready to get any items this calendar year, I was actually sad,” Lee explained to The Washington Put up on Monday (in a Kakao information). By the time the gifting attribute arrived again on line Sunday night time, “only a few people” who had texted her birthday messages experienced checked again in to send a current, she mentioned.

“I believe the previous number of times present why Kakao’s dominance can be a danger, but honestly I do not consider any other ‘competitor’ will switch Kakao at this level mainly because it’s SO deeply rooted in our life,” she reported. “I just can’t picture men and women abandoning a complete existence model just to move on to a different software.”

That did not stop rivals from seeking to get edge of the moment. Line, a messaging application run by world wide web big Naver — Korea’s version of Google — promoted its reliability. Line, Uber and the messaging app Telegram rose to the major of the App Retail store charts in Korea. Telegram taunted Kakao on Twitter, stating, “We welcome our new Korean buyers and hope they will appreciate the security of Telegram’s numerous information centre infrastructure.”

Hwang Lee, director of the Innovation, Competitiveness and Regulation Law Center at Korea University, reported Kakao can be known as monopolistic “in a simple sense,” but he would not go so significantly as declaring it a monopoly in regard to antitrust enforcement.

Korea’s Truthful Trade Commission “has stored a close eye on Kakao and other monopolistic electronic platforms for a prolonged time,” Lee said. But “their effective companies have survived federal government polices so far” as the government weighs the execs and cons of the perfectly-integrated system, he reported.

Nevertheless, the outage was a wake-up get in touch with for Koreans, Lee stated. “They understood the prospective risks of a system monopoly, which have been neglected.”

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