"If you don't give me trade secrets, I'll block calls." Kakao fined 72.4 billion won, filed by prosecutors

Kakao Mobility, which abused the overwhelming market power of the taxi general call market to demand trade secrets from competitors and blocked calls if they refused, will be subject to a provisional fine of 72.4 billion won and prosecution charges from the Fair Trade Commission.

The FTC said Kakao Mobility, which has secured an overwhelming market share of more than 90% of the general call market, started its franchise taxi business in 2019, demanding contracts to provide driver information and real-time driving information to competitors, and blocking general calls if they do not respond.

As a result, normal competition has become impossible, and Kakao Mobility's market share has increased by more than 27 percentage points in two years to 79 percent as of 2022, the FTC said.

In addition, competitors who have experienced a surge in drivers' termination of membership have been kicked out of the market one after another, leaving only Wooty, which has a more than 10-fold market share in the current merchant taxi market.

Considering the significance of the anti-competitive act of unfairly using market power, the FTC tentatively calculated 72.4 billion won, or 5% of related sales, as a penalty from May 12, 2021, the confirmed illegal period, to the end of July this year.

However, Kakao Mobility said it will file an administrative lawsuit, saying that the contract was signed on the premise of providing mutual information to resolve user inconvenience and did not use the information obtained from other operators for its business.

The amount of fines to be imposed this time will be reduced if the Securities and Futures Commission decides Kakao Mobility's accounting standards by net amount method, not total amount method, according to the Financial Supervisory Service's point.

Last year, Kakao Mobility was fined 25.7 billion won by the FTC for manipulating its distribution algorithm to drive calls that favored its franchise taxis.