Kakao and SK Planet in mobile gift dispute

By Korea Herald
  • Published : Jul 4, 2014 - 21:18
  • Updated : Jul 4, 2014 - 21:18
Kakao Corp., the operator of Kakao Talk ― the most widely-used mobile messaging service in South Korea ― is embroiled in a dispute over mobile gift-giving services with several e-commerce firms.

On Friday, SK Planet and two other firms said it lodged a complaint with the Fair Trade Commission against Kakao for abusing its dominant market position in the mobile gift exchanging market.

This week, Kakao terminated contracts with the three firms that had been offering mobile gift certificates through the Kakao platform.

As more people have been taken to giving and receiving the certificates through mobile messengers, the related market has grown by about 10-fold from 50 billion won ($49 million) in 2010 to 500 billion won this year.

Until now, Kakao had worked in tandem with the nation’s e-commerce firms such as SK Planet. But it has decided to go its own way, according to Kakao officials, who added that the decision came after Kakao received too many complaints about glitches, including short expiry dates on the certificates and complications in getting refunds.

The firms that had been offering the certificate services, however, refused to buy the explanation.

“Kakao can be seen as attempting to monopolize the mobile gift card market by exploiting its dominant position in the mobile messaging market,” SK Planet said in a statement. “This will have a negative impact on consumers.”

Some market watchers said the recent move from Kakao could be a wake-up call for KT Corp. and CJ E&M, which are both in the mobile certificate business via affiliated firms. The pair had faced backlash for refusing to refurbish their services to make them more user-friendly.

Meanwhile, Kakao has been catapulted to the center of attention in local IT circles following its announcement of plans in May to merge with Web-portal operator Daum. The new entity is slated to be listed on the Korean bourse under the name, Daum Kakao, in October.

Kakao also is seeking to expand its services overseas based on its strengthened corporate value following its merger with Daum, those close to the company said.

By Kim Young-won (