Kakao completed payments totaling 27.5 billion won (US$ 20.9 million) as compensation damages for business partners and users that experienced service disruptions due to the Pangyo data center fire last October.
In a press release, Kakao said the Korean platform giant took into account service users and partners of Kakao Games, Kakao Mobility, Kakao Entertainment as well as small businesses.
For the general user, Kakao says some 17.3 million users have downloaded paid emoticons, provided in January as compensation. In-game items were provided to Kakao Game users who experienced disruptions, while compensation was also handed out to Korean internet cafes, or ‘PC Bang’ owners.
Kakao says it took into account the demands set forth by the council consisting of the Small Business Federation, Korea Startup Forum, and Korea Consumer Federation. Citing experts in fair trade and consumer protection, the council had claimed up to 87,000 cases of damages and urged compensatory policies last year.
For small businesses, the compensation amount reflected businesses’ operating profit, availability of alternative services as well as Kakao’s market share in respective services. Kakao paid around one-tenth of the damages recording less than 500,000 won(US$380). Separate negotiations took place in cases where damages exceeded the amount.
The Kakao outage caused by the date center fire led to massive disruption of Kakao services, including bank transactions, online and offline payment systems, and overseas payment services, affecting millions of users.
The incident prompted the Korean government to strengthen measures regarding platform and data center operators. The Ministry of Science and ICT said the government approved amendments to the law subjecting them to new disaster prevention and response management obligations starting July 4. Upon investigation, the Financial Supervisory Service is reportedly considering penalizing senior officials of Kakao for failing to provide adequate backup systems in case of emergencies.
