[2021 National Audit] Jo Seung-rae "Kakao Mobility Expresses Intent to Abandon Acquisition of Substitute Driving Company"

[Asia Economy Reporter Seulgina Jo] Kakao Mobility has reportedly expressed its intention to abandon the acquisition of two designated driver companies it recently planned to acquire.

On the 5th, Cho Seung-rae, a member of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee from the Democratic Party of Korea, stated, "Kakao Mobility has decided to abandon the acquisition of two telephone-based designated driver companies it planned to acquire last August and will not pursue additional acquisitions of designated driver companies in the future."

When it became known that CMNP, a subsidiary of Kakao Mobility, was acquiring two telephone-based designated driver companies other than 1577, existing designated driver companies strongly opposed the move, fearing market monopolization. On the same day, at the National Assembly’s audit of the Korea Communications Commission, Cho plans to confirm the withdrawal of the acquisition of the two designated driver companies with Ryu Geung-seon, CEO of Kakao Mobility, who appeared as a witness.

Following its existing ‘KakaoT Designated Driver Platform,’ Kakao Mobility established a new corporation with ‘1577 Designated Driver,’ the industry leader, in July to enter the ‘telephone call’ designated driver market and aimed to expand its market share. However, existing designated driver companies opposed the move, fearing monopolization by Kakao Mobility, leading to ongoing controversy. The Korea Designated Driver Federation, composed of designated driver companies, requested the Win-Win Growth Committee to designate designated driving as a ‘small and medium-sized enterprise suitable industry’ to block large corporations from entering the market.

Assemblyman Cho said, "Monopolistic behavior by large platform companies hinders market growth in the industry and ultimately leads to increased fees, which harms users," adding, "The National Assembly and government need to revise laws and systems to establish market coexistence measures and activate service competition."