Fair Trade Commission Nears Conclusion on 'KakaoT Call Manipulation'... Mobility Industry on Alert

Monitoring Fair Trade Commission Sanctions and Aftermath Closely
Tense Differences in Stances... Legal Disputes Also Seen as Inevitable

[Asia Economy Reporter Yuri Choi] With the inauguration of Han Ki-jung as the chairman of the Korea Fair Trade Commission (KFTC), a conclusion on sanctions against Kakao Mobility, which has been suspected of preferentially allocating calls to affiliated taxis, is expected soon. Although the algorithm verification results proved that there was no call favoritism at the app level, the dominant view is that sanctions will follow since the KFTC conducted its own investigation based on the Seoul Metropolitan Government’s findings.

According to industry sources on the 20th, the KFTC plans to hold a plenary session soon to decide the final level of sanctions regarding the suspicion that Kakao Mobility funneled calls to affiliated taxis.

In April, the KFTC sent Kakao Mobility a review report containing sanction opinions. Kakao Mobility is known to have recently submitted a statement reflecting the results of the 'Mobility Transparency Committee’s' investigation into the KakaoT app algorithm. The KFTC is left only with follow-up procedures such as the plenary session, so a conclusion is expected soon. Meetings on major issues like Kakao Taxi had not been held due to delays in appointing the chairman of the plenary session, who is the Fair Trade Commissioner.

The industry believes it will be difficult for Kakao Mobility to completely avoid sanctions. The KFTC has already conveyed its intention to sanction based on the Seoul Metropolitan Government’s investigation, which found call favoritism, and its own investigation. Although the Transparency Committee concluded there was no call favoritism, the prevailing opinion is that it will be difficult to overturn the KFTC’s conclusion. While it was confirmed that there was no discriminatory logic in the algorithm at the app level, questions remain about whether there was other discrimination in the dispatch method.

On the 6th, the Transparency Committee concluded that the KakaoT Taxi dispatch algorithm did not discriminate based on business methods or call distance. The difference in acceptance rates between regular drivers and affiliated drivers was explained as a result of regular drivers selectively accepting calls after checking destination information.

If the plenary session results in a final judgment of illegality, the level of sanctions such as corrective orders or fines will be decided. The key issue is whether the corrective order will include a ban on calling affiliated taxis, specifically KakaoT Blue, through the KakaoT app. If the monopoly in the taxi call app market is seen as leading to a monopoly in the affiliated taxi market, sanctions could require separating the two. Even the judgment of illegality itself will inevitably cause repercussions. Some in the taxi industry are considering filing damage claims after the KFTC’s conclusion, alleging losses due to discrimination against non-affiliated taxis.

Even after the KFTC reaches a conclusion, disputes are expected to continue. Since the KFTC and Kakao Mobility hold completely opposing views, there is a high possibility of legal battles. If the KFTC’s sanctions lead to restrictions on Kakao Taxi’s operations, the problem will worsen. Amid efforts to raise fares due to taxi shortages, if general taxis cannot be called through the KakaoT app, it could exacerbate the taxi crisis. The KFTC cannot avoid grappling with these concerns.

An industry official said, "Even after the Transparency Committee’s announcement, controversies remain regarding the committee’s composition and the timing of the investigation, making predictions difficult," adding, "Repercussions will be inevitable depending on whether sanctions are imposed and their severity."

This content was produced with the assistance of AI translation services.