KakaoTalk Fire Outage Compensation Lawsuit, What Do Experts Predict?

Special Damages under Civil Law... Proving 'Foreseeability' Is Not Easy
Existence of Alternative Services Also Makes It Difficult to Hold Kakao Responsible
If a Class Action Is Filed, There Is a Possibility of Uniform Compensation Being Recognized

Over the past weekend, due to a fire at the SK C&C data center, major Kakao services including KakaoTalk were suspended. On the 17th, recovery work is underway at the SK C&C data center in Seongnam, Gyeonggi Province.
Seongnam ? Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] Amid growing movements for class-action lawsuits by users seeking compensation for damages caused by the KakaoTalk service outage over the past weekend, experts show differing opinions regarding the concrete possibility of compensation.

While some believe that even though KakaoTalk messenger service is free, damages caused by Kakao’s poor server management can be proven and compensated, others argue that the likelihood of actual compensation is very low due to the existence of alternative services.

Shin Jaeyeon, lawyer at LKB & Partners./Photo by LKB & Partners Law Firm website.

On the 18th, attorney Shin Jae-yeon of LKB & Partners stated, “Even free users might have had things they needed to do through KakaoTalk but couldn’t, and if that caused financial damages, those parts can be claimed.”

Attorney Shin, who is also conducting a class-action lawsuit against Kakao Games, created a Naver cafe titled ‘Compensation for Damages Caused by KakaoTalk Fire Outage’ on the 16th, the day after a fire broke out at the SK C&C Pangyo data center where Kakao’s servers are concentrated, and began gathering participants.

In a post on the cafe, he said, “Regardless of the cause of the fire, it seems possible to claim damages for Kakao’s negligence in failing to prepare for such a situation,” and added, “Those wishing to participate in the lawsuit should organize and upload their damage details.” He also mentioned, “Even if there is no specific damage, it might be possible to separately claim consolation money.”

Attorney Shin said, “Rather than recruiting participants for a class-action lawsuit, please understand this as me saying that if there are people who want to sue, it seems possible from my perspective and I can help,” and added, “We need to see first. After reviewing who wishes to file a damages lawsuit and what the damage details are, the direction of the lawsuit will be decided.”

Regarding the scope of damages, Attorney Shin predicted, “Individual damage details need to be examined, but if it is within a generally predictable range, it seems possible to claim damages; if it is a very unusual case, it will be difficult to receive compensation.”

He continued, “Among the various services provided by Kakao, there are many cases where alternative services exist, but considering the number of subscribers, Kakao often overwhelmingly dominates other alternatives. Therefore, while the existence of alternative services can be a factor limiting liability for damages, it does not exempt Kakao from liability altogether.”

Attorney Koo Tae-eon, Lawyer at Law Firm Lin. / Photo by Attorney Koo Tae-eon.

On the other hand, there are quite a few experts who view the possibility of receiving compensation from Kakao for damages caused by this incident as low.

Attorney Koo Tae-eon of Law Firm Lin, an IT specialist and former prosecutor of the Advanced Crime Investigation Division at the Seoul Central District Prosecutors’ Office, said, “In the case of paid services, damages can be compensated by extending the usage period for the days the service was unavailable, but most of the damages currently being discussed are ‘special damages’ under civil law caused by the inability to use KakaoTalk service.”

He added, “In other words, these are unavoidable damages caused by not being able to use KakaoTalk, such as missing an important contract opportunity, which are special damages that Kakao could hardly have foreseen, so practically it is difficult to receive compensation.”

Under Korean civil law, damages are generally divided into ordinary damages and special damages. For special damages, the debtor (or perpetrator) must have known or could have known that such damages could occur due to their breach of duty or intentional/negligent acts for compensation to be granted, based on the ‘foreseeability’ principle.

Attorney Koo said, “The fact that most services provided by Kakao are not monopolies but have alternatives also lowers the possibility of compensation,” and added, “For example, in the case of Kakao Taxi, there are alternative services like Tada or UT, so it seems difficult to hold Kakao liable for compensation if ordinary citizens could not catch a taxi or taxi drivers could not pick up passengers due to Kakao Taxi service outages.”

He further explained, “When consumers can easily avoid damages by choosing alternatives but choose not to and bear the damages, it is difficult to evaluate those damages as foreseeable damages by the debtor.”

Considering the repeated Kakao system outages, even if Kakao’s management negligence is recognized and damages are proven, there must be a substantial causal relationship between such damages and Kakao’s negligence for liability to be acknowledged, and proving this will not be easy.

Kim Kyunghwan, Chief Attorney at Minhu Law Firm. / Photo by Minhu Law Firm website.

Attorney Kim Kyung-hwan, an IT specialist and representative attorney at Law Firm Minhoo, who graduated from Seoul National University’s Department of Electronic Engineering, said, “Some view damages caused by Kakao outages as special damages, but since KakaoTalk use is widespread, it is difficult to conclude they are special damages, and there is room to consider them ordinary damages,” adding, “However, the issue will be how far to consider them ordinary damages; it will not be unlimited, but within a range we can accept in daily life, there is room to see them as ordinary damages.”

Attorney Kim said, “Recognition as ordinary damages means financial compensation, but considering the conservative stance of existing courts, the likelihood of courts ordering financial compensation is not high.”

He added, “However, it seems possible that courts may uniformly order compensation in the form of consolation money or similar,” and explained, “For example, if 10,000 victims file a class-action lawsuit, it would be difficult to examine each party’s specific damage situation individually, so courts may uniformly order a certain amount of consolation money recognizing a certain level of mental suffering without judging individual reasons. However, it will not be easy.”

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