South Korea’s largest instant messenger lands after power outage, prompting monopoly

KakaoTalk and other services of Kakao Corp faced a major outage after a fire broke out in a data center on the outskirts of the country’s capital, Seoul (Illustration image by Thiago Prudencio/SOPA Images/LightRocket via Getty Images)

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Shares of South Korea’s top messaging apps tumbled Monday after a massive data center outage over the weekend, disrupting the service for more than 53 million users worldwide.

was interruption because of a fire In the data center, which also hosts servers for other major Korean tech companies. KakaoTalk is not only the best messaging app in South Korea, it is also highly relied upon for everything from online payments, gaming, and rides as well as login verification for other major websites.

Kakao reported 47.5 million monthly active users in Korea during the second quarter. This represents more than 90% of South Korea’s population of 51.74 million, as of November 1, 2021.

South Korean President Yoon Seok-yeol described the impact of the outage on Cocoa as “not unlike that of the national telecoms network”. He called on relevant ministries to investigate the cause and scope of the disturbances and develop plans to prevent similar incidents.

“If there is a monopoly or an oligopolistic situation where it is manipulating the market, we need to take systematic actions nationwide for the benefit of the people,” Yoon said on Monday.

On Monday, Kakao Corp shares fell more than 9% at the open before paring losses to close nearly 6% lower. Internet giant Naver fell 2% in the morning session before rebounding to close 0.91% higher. Naver also experienced limited disruption for a while as the data center also hosts servers for the company, but it resumed most of its operations on Sunday.

The data center operator, SK Inc, was also down more than 4% at the open. Kakao affiliates Kakao Pay, Kakao Bank and Kakao Games fell more than 7% in the morning session in Korea before paring some losses. Kakao Bank closed 5.14% lower, Kakao Pay fell 4.16%, and Kakao Games fell 2.22%.

Cocoa initially announced the outage on Saturday afternoon, which lasted until Sunday morning.

“We bow our heads and sincerely apologize to all users who are experiencing disruptions to the Kakao service at this time,” the company’s co-CEOs said in a statement over the weekend.

“We promise to take maximum measures to prevent a recurrence of such issues as well as investigate the cause of this incident,” they said, adding that the company is backing up data to other facilities within the country as soon as the fire broke out.

“This is a rare case of a data center being completely affected, so it takes much longer to implement than expected [back up] measures,” they said.

In a tweet Monday morning, Kakao said some services had resumed, but users continued to report issues.

National staff

Yoon’s deputy spokesman, Lee Jae-myung, said in an afternoon briefing that the presidential office will launch a national task force to discuss the outage of courier service.

“The National Security Council has decided to set up a cybersecurity task force in light of the recent Cocoa turmoil,” Lee said, adding that this would include military officials and the National Intelligence Agency.

“The government is taking this matter seriously because the failure to stabilize communication services means that the economic and social activities of the people can be paralyzed,” South Korean Science Minister Lee Jong-ho said on Sunday.

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