[Reporter’s Notebook] National Assembly Audit Turns into a 'Kakao Audit'

The hottest issue in this year's National Assembly audit is platform companies. Each lawmaker's office is targeting platform issues, especially Kakao, to the extent that it is practically being called the 'Kakao audit.' IT companies, which need to innovate services and manage global businesses, are busy lowering their profiles these days to avoid drawing the National Assembly's attention.

The National Assembly's Committee on Economy and Finance has summoned Kim Beom-su, Chairman of Kakao's Board of Directors, as a witness for the audit. The Science, Technology, Information and Broadcasting Committee has also included Chairman Kim on its witness list. In addition, there are seven standing committees targeting Kakao, including the Industry, Trade, Small and Medium Enterprises Committee, Land, Infrastructure and Transport Committee, Environment and Labor Committee, Agriculture, Food, Rural Affairs and Oceans Committee, and Culture, Sports and Tourism Committee.

The targets are Kakao's sprawling business expansion, including service price hikes and infringement on local businesses. However, from Kakao's perspective, there is some unfairness. Although criticized as a huge conglomerate with 118 affiliates, the reality is different. Only a few affiliates, including Kakao headquarters, Kakao Games, and Kakao Entertainment, are profitable. Moreover, many affiliates are technology-related startups or production companies related to entertainment and games. Kakao Mobility, which is receiving the most criticism, has posted losses for four consecutive years until last year. From a corporate standpoint, expanding business is inevitable to generate profits.

Because of this, the industry suggests that the political circle has targeted Kakao ahead of next year's presidential election. The idea is to emphasize the value of 'fairness' to win public sentiment and secure votes from the taxi industry and small business owners who harbor strong resentment against Kakao Mobility. Of course, if IT companies including Kakao engaged in unfair practices or abuse of power during their business expansion, criticism is justified. However, whether they should be the main focus of the government audit is questionable.

Even at this moment, global giants like Google and Facebook are eyeing the domestic market. It is regrettable that domestic IT companies like Naver and Kakao, which are struggling to maintain their positions as native platforms, have to spend this year being summoned to various standing committees and receiving scoldings instead of focusing on service innovation.