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The encyclopedia · Legal & Compliance · Legal decision · 2024

Kakao Mobility blocked rival taxi calls; Korea fined it ₩15.1 billion

Korea's FTC fined Kakao Mobility for blocking rival taxi apps' calls unless they signed data-sharing deals — a fine later cut from ₩72.4B to ₩15.1B.

Kakao Mobility · 2024-10-02

What happened

Kakao Mobility runs Kakao T, Korea's dominant taxi-hailing app. From March 2019 it operated Kakao T Blue, its own franchise taxi service, and demanded that four rival franchise taxi operators — UT, Tada, Banban and Macaron Taxi — either pay fees for their affiliated drivers to use Kakao T general calls or sign partnership agreements that let Kakao collect competitors' trade secrets, including driver and taxi-operation data. Operators that refused had their drivers' calls to Kakao T blocked, which pushed UT and Tada drivers into franchise terminations and made recruiting new drivers hard.

On 2 October 2024 the Korea Fair Trade Commission announced a provisional fine of ₩72.4 billion for abuse of market dominance and abuse of a superior bargaining position, alongside a corrective order and a referral to the prosecution. Kakao T held a 96% share of the general-call taxi app market as of 2022, and Kakao Mobility's share of the franchise taxi market rose from 51% to 79% as the blocking cut off competitors.

On 17 December 2024 the FTC finalized the fine at ₩15.1 billion. The reduction followed a ruling by the Securities and Futures Commission that Kakao had inflated its sales by booking franchise fees and business-partnership fees in full as revenue — the gross method — rather than netting them, which the SFC called 'serious negligence'. The corrective order and the prosecution referral were both maintained.

Why it happened

  • Kakao Mobility used its gatekeeper position over taxi-call routing to force rivals into handing over driver and operation data — running a toll booth on the market it was also competing in.
  • The gains were real and measurable: franchise share climbed from 51% to 79% while UT and Tada lost drivers, so the conduct worked until the regulator priced it.
  • Inflating revenue on the books gave the regulator a cleaner lever — the SFC's gross-method ruling cut the base for the fine, but it also confirmed the underlying conduct.
What it costKRW 15.1B fine + corrective order + prosecution referralcostly

The lesson

Kakao Mobility cut rival taxi apps' calls unless they signed data agreements, then ran its own fine down by inflating revenue — and still ended up fined and referred to prosecutors.

Sources

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