SK "Unexpected Accident" VS Kakao "Discussing Compensation with SK C&C"... Tension in Disclosure

Last weekend, due to a fire at the SK C&C data center, major Kakao services including KakaoTalk were suspended. On the 17th, forensic investigators are moving to conduct an inspection at the SK C&C data center in Seongnam, Gyeonggi./Seongnam=Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kang Nahum] SK㈜ C&C, the data center operator, and Kakao are engaged in a dispute over responsibility for the 'Kakao outage incident' caused by the fire at the Pangyo data center.

According to the industry on the 18th, Kakao announced through a disclosure the day before, "After the normalization of services, we plan to discuss compensation for losses incurred by Kakao and its major subsidiaries with SK C&C."

On the same day, SK, the holding company of SK C&C, also issued a disclosure stating, "The Pangyo data center has regularly conducted inspections in accordance with safety regulations under relevant laws, but since this unforeseen accident occurred, we will thoroughly review the supplementary measures and implement actions to prevent recurrence, strengthen safety management, and further improve service levels."

While Kakao expressed its intention to receive compensation for its losses, SK emphasized the 'unforeseen accident' and essentially stated that it will only take responsibility for parts it is liable for.

Scene of the fire at Building A, SK C&C Pangyo Campus, Seongnam, Gyeonggi Province on the 16th. The fire, which occurred around 3:30 PM the previous day at the SK C&C data center, caused the services of server tenants such as Kakao and Naver to go down one after another. In particular, Kakao services including KakaoTalk messenger, portal Daum, KakaoT, KakaoPage, and KakaoPay experienced widespread disruptions, resulting in a nationwide outage lasting about 10 hours or more. Photo by Hyunmin Kim kimhyun81@

For now, the industry expects Kakao to first compensate its own and its affiliates' service users affected by the fire and then proceed with claiming subrogation rights against SK C&C.

The scale of business damage Kakao suffered due to the data center fire is estimated to be in the 20 billion KRW range. Including compensation amounts to be paid to Kakao service users, the damage scale could be even larger.

The key issue is the scope and scale of damage compensation. SK C&C has various insurance policies to cover compensation for tenants in the event of an accident at the Pangyo data center. These include liability insurance covering personal injury and property damage (limit of 7 billion KRW), 'INT E&O' professional liability insurance for information and network technology (limit of 1 billion KRW), and electronic financial transaction liability insurance (limit of 700 million KRW). SK C&C is likely to plan compensation within the insurance limits. In this case, a legal dispute with Kakao, which requires hundreds of billions of KRW in customer compensation, may arise.

Meanwhile, a dispute over the initial response procedure immediately after the fire is also ongoing. SK C&C claims that, at the request of the fire authorities, it sought 'understanding' from clients and cut off the entire server power supply. An SK C&C official said, "We proceeded according to the manual that informs clients of changes due to emergency situations."

On the other hand, Kakao claims there was no process of seeking 'understanding' and that the power cut was carried out through a unilateral notification. A Kakao official said, "We did receive contact from SK C&C before the power cut, but it was a notification, not a request for consultation."

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