'271 Billion Won Fine' Kakao Mobility Files Administrative Lawsuit Against Fair Trade Commission

Fair Trade Commission Rules Franchise Taxis Were Given Preferential 'Calls'
271 Billion KRW Fine Imposed on Kakao Mobility
"AI Dispatch Enhances Consumer Benefits" Administrative Lawsuit

Kakao Mobility, which was fined 27.1 billion KRW over allegations of 'call (dispatch) favoritism,' has filed an administrative lawsuit against the Fair Trade Commission.

On the 19th, Kakao Mobility stated, "We decided to file an administrative lawsuit to seek a legal judgment," and added, "We have also filed a provisional injunction lawsuit against the corrective order."

In February this year, the Fair Trade Commission imposed a corrective order and a fine of 27.1 billion KRW on Kakao Mobility, alleging that it manipulated the dispatch algorithm for mid-sized taxis in the 'KakaoT' application to favor 'KakaoT Blue' affiliated taxis.

The KakaoT taxi call service is divided into 'general calls,' where passengers do not pay a commission, and 'Blue calls,' where passengers pay a commission of up to 3,000 KRW. The Fair Trade Commission judged that Kakao Mobility gave preferential treatment to affiliated taxis even during general calls to increase the number of affiliated taxis.

The Fair Trade Commission found that from March 2019 to mid-April 2020, Kakao Mobility operated a logic (ETA method) that dispatched calls to drivers with the shortest arrival time to the passenger's location. However, if a KakaoT Blue taxi was available within a certain time, it was prioritized over a closer general taxi. For example, if an affiliated taxi was 6 minutes away, it could be dispatched ahead of a non-affiliated taxi that was 5 minutes away.

In a statement at the time, Kakao Mobility said, "During the FTC review process, it was confirmed that the AI dispatch logic helped passengers return home and improved consumer benefits, but this was not reflected in the outcome," and added, "The decision only focused on mechanical equal dispatch among taxi drivers and ignored the efforts of drivers who diligently accepted calls. It is regrettable that effects such as the reduction of ride refusals were proven by data but not reflected."