[Asia Economy Reporter Kang Nahum] Kim Beom-su, chairman of the Kakao board of directors, will appear as a witness at the National Assembly's Political Affairs Committee audit on the 5th. It is the first time in three years since 2018. As this is his first time facing the media since the controversy over Kakao’s infringement on local businesses intensified, attention is focused on the messages and explanations he will deliver.
According to the National Assembly on the 5th, Chairman Kim has expressed his intention to attend the Fair Trade Commission audit held by the Political Affairs Committee on the same day. Accordingly, Kim is expected to appear at the audit venue from 2 p.m.
Witnesses at the audit may submit a written excuse and not attend or send a proxy if they have reasons such as overseas business trips. Kim Jung-ju, founder of Nexon, who was also selected as a witness, will not attend the audit on the day due to an overseas business trip.
It is interpreted that Chairman Kim has shown a will to ‘face the issue head-on’ as a responsible management measure amid growing criticism of monopolistic behaviors by platform companies including Kakao.
Members of the Political Affairs Committee are expected to question Chairman Kim about the infringement on local businesses caused by sprawling business expansion, increased user fees due to monopolistic market structures, and mergers and acquisitions of competing affiliates. It is reported that Kim started preparing for the audit early in the morning by meeting with Kakao and its executives.
The biggest point of interest on the day is whether Chairman Kim will announce additional measures. Previously, on the 14th of last month, Kakao announced a coexistence plan including ▲ the establishment of a 300 billion KRW fund to support small business owners ▲ withdrawal from flower, snack, and salad delivery brokerage services ▲ abolition of KakaoT’s ‘Smart Call’ service, but many in the industry and political circles criticized it as insufficient. If the lawmakers’ questioning continues, it is expected that Chairman Kim may directly mention additional measures.
However, a Kakao official said, "This is a session to listen to the lawmakers’ criticisms and opinions, so there will be no additional measures announced by Kakao," adding, "It will mainly be an opportunity to explain misunderstandings directed at Kakao."
In the industry, it is known that Chairman Kim will argue that the sprawling expansion controversy is not about reckless market expansion but about investing in promising startups and contributing to building an ecosystem that allows them to grow. Regarding criticism that Kakao affiliates hold overwhelming dominance in the markets they have entered, it is expected that he will emphasize that their sales are minimal compared to their industry status.
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