Kakao Mobility Slapped with $10.5M Antitrust Fine for Restricting Rivals
South Korea’s Regulatory Crackdown on Ride-Hailing Dominance
South Korea’s Fair Trade Commission (KFTC) has imposed a $10.5 million (KRW 15.1 billion) fine on Kakao Mobility, the ride-hailing subsidiary of tech giant Kakao, for anti-competitive practices that limited rivals’ access to its platform. The penalty marks a significant reduction from the initial $50.3 million (KRW 72.4 billion) fine proposed in October, after regulators recalculated the company’s operating profits.
Key Details of the Antitrust Violation
- Market Dominance: Kakao Mobility controls 96% of South Korea’s taxi-hailing market (2022 data)
- Monthly Active Users: 13.2 million (Kakao) vs. 700,000 (Uber) and 6,400 (TADA) as of October 2024
- Anti-Competitive Tactics:
- Required franchise compe*****s to pay access fees or share sensitive operational data
- Blocked non-compliant drivers from using the Kakao T app
Parallel Financial Penalty for Accounting Irregularities
In a separate regulatory action, South Korea’s Financial Services Commission fined Kakao Mobility $2.47 million (KRW 3.4 billion) in November 2024 for suspected accounting fraud. The case has been referred to prosecutors for criminal investigation.
How Kakao Maintained Market Control
Kakao Mobility operates through its flagship Kakao T app, which offers:
- General ride-hailing services (available to all drivers)
- Franchise-hailing services (Kakao T Blue)
According to KFTC findings, the company’s restrictive practices helped grow its market share from 51% in 2020 to 79% in 2022. Major compe*****s affected include:
- Banban
- Macaron Taxi
- TADA
- Uber Taxi (formerly UT)
Company Defense and Legal Response
Kakao Mobility spokesperson J. Choi stated:
“Blocking franchise taxis from accessing calls on the Kakao T app is actually done to minimize call duplication between platforms and enhance user convenience.”
The company maintains its commitment to fair competition while pursuing administrative litigation to challenge the ruling.
Broader Context: Kakao’s Regulatory Challenges
- Leadership Issues: Founder Brian Kim was granted bail in October 2024 after 100 days in custody for alleged stock manipulation
- Business Performance: Q3 2024 showed improved operating profits despite stagnant sales
- AI Venture Concerns: New chat-based service Kanana receiving lukewarm response due to data limitations
This case highlights growing global scrutiny of tech platforms’ market dominance, particularly in the competitive Asian ride-hailing sector.
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