South Korea’s antitrust watchdog has fined Kakao Mobility, the ride-hailing unit of Korean tech agency Kakao, $10.5 million (KRW 15.1 billion) for limiting rivals’ entry to its taxi app — reducing the penalty from an preliminary positive of $50.3 million (KRW 72.4 billion) as the sooner sanction was based mostly on an overestimated calculation of the corporate’s working earnings.
Separately, in November, the Financial Services Commission fined the taxi-hailing agency $2.47 million (KRW 3.4 billion) for suspected accounting fraud, referring the case to the prosecutor for additional investigation.
Kakao Mobility presents normal ride-hailing companies by way of its Kakao T app and franchise-hailing companies beneath its subsidiary model, “Kakao T Blue”, additionally throughout the identical app.
Franchise taxis, together with Uber and native peer TADA, can use Kakao’s platform since normal taxi hailing is a brokerage service that intermediaries present to all drivers on the platform beneath South Korea’s Passenger Transport Service Act. While franchise taxis work with platform-based transportation suppliers akin to Uber to supply specialised hailing companies as a substitute for common hailing — such a differentiating on automobile high quality, say, or pick-up time.
Kakao Mobility holds the biggest market share within the nation’s taxi-hailing market, capturing a 96% market share as of 2022, based on a press release by the Korea Fair Trade Commission (KTFC) in October. As of October, Kakao Mobility, also called Kakao Taxi, remained the market chief — with 13.2 million month-to-month energetic customers — whereas rivals Uber, TADA, and I’M had 700,000; 6,400; and 5,800 MAUs, respectively, per an area media report.
Last month, the KTFC said that Kakao Mobility had demanded franchise rivals, akin to Banban, Macaron Taxi, TADA, and Uber Taxi (previously generally known as UT), both pay a price for his or her drivers’ entry to the Kakao T app or signal partnership agreements permitting Kakao Mobility to gather their operational knowledge, together with delicate enterprise data akin to driver particulars. If they refused, franchise drivers who use Kakao’s platform could be blocked from utilizing the Kakao T app.
Uber and TADA didn’t have partnerships with Kakao Mobility, inflicting their taxi drivers to dam using its Kakao T app. Instead, Banban and Macaron Taxi partnered with Kakao Mobility, based on the KFTC’s October assertion. The partnerships helped Kakao Mobility develop its marketshare from 51% in 2020 to 79% in 2022, cementing its market dominance.
“Blocking [franchise taxis from accessing calls on the Kakao T app] is definitely completed to attenuate name duplication between platforms and improve person comfort,” claimed J Choi, a spokesperson at Kakao Mobility, in an emailed assertion.
“Kakao Mobility is totally dedicated to supporting the federal government’s initiatives to advertise honest competitors throughout the platform business whereas concurrently pursuing administrative litigation to unequivocally exhibit that no authorized violations occurred,” the assertion added.
Kakao reported an improved working revenue for the third quarter of this yr in November, however issues stay as the development got here with out gross sales progress. Furthermore, the corporate’s new chat-based AI service, Kanana, which goals to launch a closed beta service subsequent yr, is receiving a mediocre market response resulting from its restricted knowledge allocation, per native media reviews.
In different current information, Kakao’s chairman and founder, Brian Kim, was granted bail in October after 100 days of arrest for alleged involvement in inventory manipulation.
