KAKAO fire shames cyber powerhouse South Korea

  KAKAO CORP is a Korean Internet company and a Korean super technology giant. KAKAO has more than 130 subsidiaries, providing network communication chat (KakaoTalk), network payment (Kakao Pay), network bank (Kakao Bank), network map (Kakao MAP), network game (Kakao Game), network navigation, network 11 services including shopping.
  KakaoTalk is similar to our domestic WeChat. The number of users reached 43 million (the total population of South Korea is about 52 million), and there are 53 million users worldwide.
  Kakao does not yet have its own data center, and its servers are hosted by South Korea’s SK C&C Pangyo data center in the south of Seoul. On October 15th, a fire broke out in the data center, which caused a power outage and paralyzed about 32,000 servers of Kakao (accounting for about 30% of the total number of Kakao servers).
  The breakdown of Kakao Talk had disastrous consequences for Korean society. According to South Korean media reports, Kakao Talk, the chat tool used by most Koreans, could not be connected for more than 10 hours, causing kakao communication, email, online banking, settlement, travel and other service systems to stop functioning, calling taxis, map navigation, etc. Various services based on Kakao, such as mobile payment and identity verification, have come to a standstill.
  Kakao Talk is also the default communication method for many government and commercial services. These institutions also provide public services through KakaoTalk. In other words, almost no one among Korean nationals has not been affected by this “Kakao chaos”.
  This is the longest outage since KakaoTalk was launched 12 years ago. Some media commented that this incident proved that “information and communication technology powerhouse” South Korea has become extremely vulnerable in an instant. The failures underscore how dependent South Korea is on Kakao for information.
  Kakao Corp’s stock price plummeted 9.5% on October 17 after a “full-line collapse” of network functions, and the decline narrowed to nearly 6% as of the close. It should be said that the direct economic loss caused by the fire itself is not too large, but the impact is extremely serious.
  Korean media are even more worried that Kakao, a “super platform” operator that has a wide impact on people’s lives, has been paralyzed, exposing the true face of South Korea, a “network power”. Korean experts said that the “Kakao chaos” exposed the risks of the highly developed digital technology and the rapid arrival of the “ultra-connected society”. A professor at the Department of Sociology at Seoul National University said, “This Kakao incident has shown people that a hyper-connected society built on the basis of platforms can easily collapse.”
  The incident sparked controversy over monopoly operations in the industry. Kakao’s huge market dominance is actually equivalent to a national basic communication network in South Korea, but because it belongs to the field of private enterprises, it is not subject to government management and control.
  On October 17, President Yin Xiyue stated that “the vast majority of citizens feel inconvenienced by the interruption of Kakao services. Although Kakao communication network services are operated by private companies, in the eyes of the public, this is no different from the national basic communication network.” . Yin Xiyue also said, “In order to protect the interests of the people, the state needs to intervene in market monopoly behavior.”
  Conservative President Yoon Suk-yue, who advertises himself as “pro-market” and emphasizes respect for corporate freedom, personally mentioned the “monopoly” issue of a specific company.
  After the kakao service collapsed, President Yoon Seok-yue asked the relevant departments to deal with the monopoly risk and promote the improvement of the system. The Chief Secretary of Communications of the Presidential Office of Han pointed out, “We fundamentally respect the power of corporate self-discipline and creativity. However, if the market order is distorted and there are malpractices, the country must respond.” “The Yun Xiyue government will never allow companies to lose responsibility “, the government defined the accident as Kakao’s irresponsible behavior.
  Korea International Radio reported that the Korean Fair Trade Commission plans to revise the review criteria for business mergers to prevent monopolistic platform companies from excessively expanding their market power. The Fair Trade Commission’s move is to strictly supervise the restriction of competition that occurs when platform companies enter new industry markets through mergers and acquisitions.

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