KaKao

- Extensive KRW 27.5 billion compensation package distributed to Kakao's Group, users, and partners.

- A dedicated council developed criteria for supporting free service users, accepting applications for five months through chatbots, mail, and personal visits.

- Decisive steps taken to bolster small business stability, with ongoing dialogues with the Federation of Small and Medium Businesses.

 

[June 30, 2023] Kakao (CEO Hong Eun-taek) finalized the support process for service disruptions caused by the fire at the SK Pangyo Data Center on October 15th last year. With the closure of the application process for small business damage on June 30th, the total compensation for users and business partners in the KakaoGroup amounted to approximately KRW 27.5 billion.

 

# Additional support measures for partners beyond contractual compensation... Council established to set free service damage support criteria.

 

Beyond the standard compensation outlined in their terms and conditions, Kakao, along with its affiliates such as Kakao Games, Kakao Mobility, and Kakao Entertainment, promptly initiated additional support measures for affected partners. This was after settling the prescribed compensation for paid service users and partners by the end of December.

 

Acknowledging its social responsibility for the inconvenience caused to users’ daily lives and business activities, Kakao decided to compensate even for free services. To establish a rational criterion for this unprecedented compensation, Kakao formed the '1015 Damage Support Council' (hereinafter, the "Council") on November 14th last year, comprising various organizations like the Federation of Small and Medium Businesses, Korea Startup Forum, Korea Consumer Federation, and experts in fair trade and consumer protection. After meticulous analysis of approximately 87,000 reported damage cases, the Council announced its compensation policy for general users and small businesses on December 29th.

 

Following the Council's decision, Kakao provided three types of KakaoTalk emoticons (one for permanent use and two for 90-day use) to general users in January, downloaded by about 17.3 million users. For small businesses, the Council's criteria were used to determine the compensation amounts. Factors such as profit margin, availability of alternative services, and Kakao's market share were considered. The compensation was set at ▲KRW 30,000 for sales loss of up to KRW 300,000, ▲KRW 50,000 for losses between KRW 300,000 and KRW 500,000, and ▲individual negotiations for losses exceeding KRW 500,000. Out of 451 applications, 205 met the Council's criteria, with a total support amount of about KRW 50 million. The compensation was distributed in three phases starting mid-March, based on the order of application receipt and review completion.

 

Separately, Kakao plans to form a mutual cooperation body with the Federation of Small and Medium Businesses in early July to support the stable growth of small businesses. Both parties will soon discuss and finalize specific details, such as the scope and scale of additional support measures.

 

Having submitted the '1015 Damage Support Report' to the Council, Kakao concluded the process without further extensions. However, small businesses that have applied but need to supplement their documentation still can proceed with the process through the customer center.

 

Other Kakao affiliates extend remedies for service interruptions: Kakao Games issued in-game items as redress to users impacted by service disruptions and offered financial compensation to PC cafe and channeling service partners. Kakao Mobility rolled out coupons and points to users affected by the service interruptions and provided compensation to service providers across various sectors, including taxi, designated driving, parking, quick service, and car washing. They also implemented specific compensation protocols for taxi drivers whose losses surpassed the company’s predefined limits, evaluating based on a comparison with the previous week's earnings, and introduced an enhanced support scheme for designated drivers.

 

Kakao Entertainment, in an effort to support KakaoPage and Kakao Webtoon creators and content providers, distributed 3,000 cash per platform to users last October. This initiative allowed users to access content, which was then settled with the creators and publishers, thereby contributing to an increase in their earnings.

 

# Focusing on the convenience of small businesses... Applications over 5 months via chatbot, mail, and visits

 

Focusing on the convenience of small business owners, Kakao streamlined the process for submitting damage support documentation. To accommodate the busy schedules of small business owners, Kakao established an official chatbot that allowed for the easy and quick submission of documents right from the guidance stage. Various channels were utilized for submissions, including the customer center webpage, phone, and mail. The required documents were simplified, and a dedicated customer center was operated, staffed with over 100 personnel.

 

Moreover, to ensure maximum participation, Kakao provided a total of five months for submissions. This included one official month and three extended periods, adding up to approximately four additional months. Kakao also directly visited small business owners who were struggling with the submission process. Additionally, to maximize awareness among small business owners about the support funds, Kakao utilized various channels, including KakaoTalk, Facebook, Twitter, and other social media platforms for notifications.

 

Separate from the damage support funds, Kakao launched the 'KakaoTalk Channel Cash Program for Small Businesses.' This initiative enabled small business owners to use KakaoTalk channels to send messages containing news, announcements, and event information, thereby generating new sales through marketing activities. Kakao provided free channel cash for up to 50,000 won, allowing for the dispatch of up to 3,000 channel messages. Approximately 900 small business owners applied for this program, with about 45 million won worth of cash being distributed.

 

Hong Eun-taek, CEO of Kakao, stated, “Based on the measures prepared by the Council, we strived to ensure that small business owners who suffered actual damages could receive support funds quickly and conveniently. Going forward, Kakao plans to develop various methods to create a healthy industrial ecosystem where small businesses can coexist and grow with us.”

 

In addition, Kakao has been running the ‘Sosin Merchant' (Merchants with Conviction) project since last year, supporting nationwide merchants who operate their businesses with conviction. This includes the ‘Our Dangol Market’ program to assist traditional market vendors with digital transformation and the ‘Sosin Merchant Support Benefits’ through KakaoTalk channels. Since 2016, Kakao has also been offering the ‘Kakao Class’ for aspiring entrepreneurs and small business owners to enhance their digital capabilities. Furthermore, through the ‘Kakao Business Seminar,’ Kakao consistently provides various courses introducing business platforms and marketing know-how to small business operators and business partners. (End)