Prosecutors Indict Kakao Mobility CEO Without Detention on Charges of Blocking Calls

Accused of Blocking Competitors' Calls by Abusing Market Dominance

Kakao Mobility Corporation and its executives have been brought to trial on charges of interfering with the business activities of competitors by abusing their position as the number one taxi app provider by market share.

On January 26, the Financial Investigation Division 2 of the Seoul Southern District Prosecutors' Office (Acting Chief Prosecutor Lim Sejin) announced that it had indicted Kakao Mobility Corporation and three executives, including CEO Ryu Geungseon, without detention, on charges of violating the Monopoly Regulation and Fair Trade Act.

According to the prosecution, from February 2021 to December 2023, Kakao Mobility is accused of abusing its dominant market position in the taxi general-calling app market by demanding business secrets such as departure and route information or commissions from four small and medium-sized affiliate competitors.

They are also charged with unfairly obstructing business activities by blocking general-calling services through their own taxi app to taxi drivers affiliated with competitors who did not comply with these demands.

The prosecution noted that the offenses were committed based on Kakao Mobility's status as a dominant market player, holding a 95% share in the "mid-sized taxi app general-calling" market.

The prosecution explained that this case caused significant damage to the market. "Drivers who were blocked from general-calling services suffered an average monthly income loss of about 1.01 million won," the prosecution stated. "In particular, Company A saw its number of affiliate operating vehicles reduced by half before and after the blocking period, leading to the suspension of its business," they added.

However, the prosecution determined that it was difficult to recognize charges in the so-called "call allocation" case reported by the Fair Trade Commission in 2023, as well as in the case of violations of the External Audit Act notified by financial authorities, and thus issued a non-prosecution decision after legal review.