'Call Blocking' Abuse Kakao Mobility Fine Reduced from 72.4 Billion to 15.1 Billion Won Confirmed

Revenue Recalculation Based on Decision by the Securities and Futures Commission

Kakao Mobility, the leading taxi-hailing platform in the market, has been finally fined 15.1 billion KRW by the competition authority for unfairly blocking calls to competitor-affiliated taxis based on its dominant market position. Following the recent judgment by the Securities and Futures Commission (SFC) under the Financial Services Commission that Kakao Mobility had 'inflated sales,' the sales amount used as the basis for the fine was reduced, resulting in a downward adjustment from the provisional fine of 72.4 billion KRW imposed last September.

On the 17th, the Korea Fair Trade Commission (KFTC) announced that it had recalculated and finalized the fine regarding Kakao Mobility's violation of the Fair Trade Act. This recalculation of the fine by the KFTC reflects the SFC's final judgment on Kakao Mobility's sales amount while maintaining the corrective order, prosecution referral, and the fine calculation rate (5%) decided at the plenary meeting on September 25.

The KFTC's fine is calculated by multiplying a certain percentage according to the degree of violation based on the 'related sales amount' obtained through unfair practices. Kakao Mobility had been accounting for the franchise fees received from affiliated taxis (approximately 19%) and the business partnership fees paid to taxis (approximately 16.7%) in full as operating revenue and operating expenses, respectively, using the gross method.

On September 25, the KFTC provisionally imposed a fine of 72.4 billion KRW by applying the fine calculation rate based on this gross method. At that time, the final judgment by the SFC on whether Kakao Mobility's application of the gross method constituted sales inflation was still pending.

On the 6th of last month, the SFC judged that applying the net method, which recognizes sales by deducting business partnership fees from franchise fees (about 2.3%), aligns with accounting standards. It decided to sanction Kakao Mobility, stating that applying the gross method constituted a serious negligence. In line with this SFC decision, the KFTC applied the net method, multiplied the reduced related sales amount by the calculation rate, and reconfirmed the fine.

The KFTC explained, "Following the recent final resolution by the SFC that applying the net method to calculate sales is consistent with accounting standards in Kakao Mobility's case, the Commission also finalized the fine based on the net method."

Meanwhile, Kakao Mobility was previously fined 25.7 billion KRW by the KFTC for 'call steering' that favored its affiliated drivers through internal dispatch algorithm manipulation early last year.

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