Shulou(Shulou.com)11/24 Report--

CTOnews.com, October 24, Korea's Fair Trade Commission (FTC) has imposed 14 sanctions or penalties on Kakao Group and its affiliated companies in the past five years.

From January 2017 to July 2021, the Fair Trade Commission investigated 19 cases related to allegations of unfair trade practices between Kakao and its affiliates, according to data provided by the Korea Fair Trade Commission to Yoon Joo-kyung, a member of the National political Affairs Committee on October 23. With the exception of 5 cases that ended with voluntary correction (4 cases) and no punishment (1 case), Kakao and its subsidiaries were sanctioned or punished in the remaining 14 cases.

The number of annual sanctions against them was two in 2017, three in 2018, four in 2019, one each in 2020 and 2021, and three in 2022. In a major case, Kakao received warnings and fines from market regulators in August 2018, accused of fraudulent, exaggerated and deceptive behavior. In December of the same year, he was warned and fined for violating the resolution of the board of directors and the disclosure of large-scale internal transactions between the five affiliated companies of the Kakao Group.

In July 2019, Kakao received a corrective order and faced a fine for obstructing the withdrawal of subscription. In March 2021, Kakao was warned of a false report on the conversion to a holding company. In July this year, two warnings were issued.

Kim Beom-soo, the founder of Kakao, has been charged with violating the Electronic Commerce Consumer Protection Act for violating his obligation to keep transaction records and falsely submitting specified data. Among Kakao's affiliated companies, Kakao Commerce, which merged with Kakao in September 2021, received warnings and fines in May 2020 for seducing fraudulent, exaggerated and deceptive consumers.

In addition to these cases, FTC is investigating and reviewing K-Cube Holdings's violations of voting restrictions, but according to members, details cannot be disclosed at this stage. K-Cube Holdings is a company in which Kim Beom-soo, the head of the center, owns 100 per cent of the shares.

"according to FTC regulations, K-Cube Holdings is an affiliated company of the Kakao Group, but it is not a subsidiary of Kakao." Kakao officials said. "Kakao does not have any shares in K-Cube Holdings and K-Cube Holdings holds 10.58 per cent of Kakao."

CTOnews.com learned that recently, Kakao Co-CEO Whon Namkoong has announced its resignation due to widespread service disruptions by Internet giant Kakao, which has caused chaos in South Korea, which relies heavily on the company's services. On October 15th, a fire broke out at the SK ClearC data center south of Seoul, leading to widespread disruption of Kakao services and public criticism of Kakao and its subsidiaries.

"South Korea's Internet service has been disrupted, and tech giant Kakao CEO has announced his resignation."

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