Kim Beom-su's Reform Willingness Fails at Kakao Mobility... Investment Faces 'Red Light' Amid Fine Sanction

Proposed Voluntary Correction Plan for Unfair Call Blocking Rejected by Fair Trade Commission
Setbacks Including Taxi Call Platform Acquisition Deadlock Accumulate

Kakao Mobility's voluntary corrective plan to resolve the 'call blocking' issue against affiliated taxis has been rejected by the Fair Trade Commission, increasing the company's concerns. It is expected that imposing fines will be inevitable, and there are also forecasts that investments could be adversely affected.

According to the related industry on the 30th, Kakao Mobility showed a bewildered reaction after the Fair Trade Commission dismissed the consent decree proposal. However, since the final result has not yet been determined, the company stated that it will actively participate in the review and prepare countermeasures according to the disposition. A company official said, "It is a cautious situation, but since the review remains, we plan to actively provide explanations."

The consent decree is a system where a business subject to investigation and review by the Fair Trade Commission proposes corrective measures such as restoration and consumer damage relief, and the Fair Trade Commission closes the case instead of determining illegality. Kakao Mobility applied for the consent decree to conclude the case early and minimize monopoly controversies rather than contesting the legal judgment. The consent decree included providing general calls to taxi drivers affiliated with UT, signing partnership contracts with other franchise headquarters, and establishing a 10 billion KRW fund for competition promotion and mutual growth. It also included plans to use the fund for scholarships for taxi drivers' children and research on the development of the mobility and taxi industry.

However, the dismissal of the consent decree procedure application on the 28th seems to have caused unavoidable damage. The Fair Trade Commission is conducting a review of Kakao Mobility, which could lead to corrective orders, fines, and even prosecution. It is known that the review report previously sent by the Fair Trade Commission to Kakao Mobility contained details about fines and prosecution proceedings. Accordingly, some expect that in addition to fines, legal disputes and changes in the revenue structure could make it difficult to attract additional investments.

Kakao's efforts to restore trust have also been impacted. To completely overhaul the taxi commission system and regain trust, Kakao held private meetings with the four taxi organizations (National Taxi Labor Union Federation, National Democratic Taxi Labor Union Federation, National Private Taxi Transport Business Association Federation, and National Taxi Transport Business Association Federation). Founder Kim Beom-su personally chaired the third emergency management meeting, and at the second emergency management meeting held earlier, a management reform committee chaired by Director Kim Beom-su was launched.

Kakao Mobility is facing compounded difficulties, including a halt in mergers and acquisitions (M&A). The acquisition of Free Now, Europe's largest taxi-hailing platform, has effectively fallen through. Allegations of inflating sales by around 300 billion KRW are also hindering Kakao Mobility. The Financial Supervisory Service has been conducting an accounting audit on Kakao Mobility for suspected accounting fraud. The Financial Supervisory Service is investigating allegations that Kakao Mobility signed franchise contracts with affiliated taxis, charged 20% of operating sales as royalties, and returned 15-17% of sales to franchisees through business partnership contracts, effectively earning only 3-4% of operating sales but reported inflated sales of 20%.

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