Rival parties rap Kakao over disruption, summon founder for parliamentary audit

The ruling and main opposition parties lashed out at tech giant Kakao Corp. on Monday, branding a massive service disruption that occurred over the weekend as a “digital platform disaster” and summoning its founder to a parliamentary audit.

On Saturday afternoon, a fire started at a SK C&C building that houses the data center that Kakao uses, prompting a power outage that disrupted the company’s namesake messaging service KakaoTalk, as well as ride-hailing and public services tied to the app that more than 40 million use.

The blaze also affected Naver, the country’s top internal portal, which uses the same data center.

“The point of this crisis was that the business did not have appropriate backup systems in order to cut costs,” Rep. Park Hong-geun, floor leader of the main opposition Democratic Party (DP), said, accusing Kakao of failing to “think about responsibilities while maintaining the market dominant position.”

“Considering that digital services provided by the private sector have deeply permeated into the people’s lives, we can no longer leave things to individual companies,” he said. “We will swiftly provide legislative measures so that we will not again become helpless against such digital platform disasters.”

The ruling People Power Party (PPP) blamed Kakao for failing to have safety measures in place.

“Despite expanding its business based on the messaging service, with 134 affiliates in operation as of August, the company did not have any preventive measures,” PPP floor leader Joo Ho-young said, noting how the company does not run its own data center.

Citing security needs, Joo urged the parliament to revisit a 2020 bill aimed at designating data centers as state disaster management facilities. Companies had protested against the bill, calling it excessive regulation.

Under the proposal, businesses have to report to the government if a disaster or service disruption occurs at their data centers. The government can conduct an on-site probe of the respective incident and issue a fine of up to 3 percent of the affected company’s sales if it was found to have breached the regulation.

“Considering that our country has to sufficiently prepare against North Korea’s threats that may involve network disruption, the need for relevant measures is pressing in terms of national security.”

The PPP leader said the party will hold a policy consultation meeting with the science ministry and look into views calling for tougher regulations to keep platform giants in check.

In the first legislative action following the disruption, DP Rep. Jo Seoung-lae and 13 other lawmakers created a bill that calls for including key digital service providers in the government’s disaster response system. Currently, only infrastructure communication operators and major broadcasters are covered by the plan.

The rival parties agreed to request Kakao and Naver founders, Kim Beom-su and Lee Hae-jin, respectively, as well as SK Group Chairman Chey Tae-won, testify at a parliamentary audit of the science ministry scheduled for Monday next week. Also included in the list were chief executives of the three companies.

The PPP had initially called for requesting Kakao’s CEO attend the parliamentary session, while the DP claimed the founder should attend the audit to respond to questions on systemic management issues.