November 29, 2024

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Drivers using Kakao's chauffeur platform service protest in front of the South Korean parliament in Yeouido, Seoul, on Monday, asking for proper compensation for the time they couldn't operate due to Kakao's server failures. (Yonhap)

The Ministry of Science and ICT said Thursday that it is mulling writing a guideline on how tech giant Kakao should compensate its free-service users who suffered damages during its service outage earlier this month.

The government hopes that the guideline, which would be the first of its kind, would help expedite the compensation process under a "first compensate" principle, a ministry official told Yonhap.

This comes after Kakao Chief Executive Officer Hong Eun-taek said the company would compensate its free-service users who suffered damages during the service blackout caused by a fire at an SK C&C data center on Oct. 15. Free-service users affected include those who weren't able to use the messenger KakaoTalk and taxi drivers who use the platform for free but weren't able to receive calls.

As Korea has no laws or precedents that require platform providers to compensate free-service users and indirect damages, individuals can only seek compensation through the court. Judges would decide the parameters of compensation based on private contracts outlined in the services' terms and conditions, but it may take a long time before a verdict is given, according to experts.

The ministry is currently referencing how South Korean telecommunications provider KT handled compensation for its service failures in 2018 to set up the parameters for Kakao’s compensations under the guideline, according to the ministry official.

KT experienced server failures in 2018 due to a fire in one of its facilities. The fire cut communications, internet and some bank functions for about a day in parts of Seoul and Gyeonggi Province.

KT had reimbursed users in 2018 who suffered both direct and indirect damages, despite there being no legal requirements for the company to compensate. It took KT six months for the compensations to be finalized.

Kakao has received over 45 million claims for compensation, as of Monday, through a dedicated KakaoTalk channel, according to data submitted to parliamentary audits by Kakao founder Kim Beom-su.

Kakao earlier also released a compensation plan for those who use its paid services, such as music streaming platform Melon, Kakao’s web comics and Kakao T’s premium taxi-hailing option.

By Lee Seung-ku (seungku99@heraldcorp.com)