South Korea’s internet giants are increasingly finding themselves in the cross hairs of the country’s regulators, which has shaved billions of dollars off the fortune of the country’s wealthiest person.
Kim Beom-su, founder and chairman of Kakao, has seen his fortune fall by $4.5 billion since hitting a peak in late June that saw the self-made entrepreneur sitting atop the country’s wealth ranking with a net worth of $16.2 billion. But since then, shares of his Seoul-based company have plunged more than 26%, which has pushed his wealth down to $11.7 billion on the Real-Time Billionaires List.
Prominent lawmakers and regulatory officials are tightening internet regulations in ways that could hamper the fast-growing company that’s known best for its mobile messenger.
The Fair Trade Commission’s Vice Chairman Kim Jae-shin told a symposium last week that his agency was examining ways to crack down on tech companies like Kakao and search giant Naver that stand accused of misusing their market dominance, UPI reported Friday. The report says Kim had found that the two companies have abused their positions as “both referees and players” to drive traffic to their own businesses.
Kakao has specifically drawn criticism for using low fees to eliminate competitors and later leveraging its “monopoly position” to raise platform fees and usage prices, Korean news website Newsdirectory3 reports. It says ruling Democratic Party lawmakers Song Gap-seok and Lee Dong-ju are discussing ways to regulate any unfair trade practices being done by Kakao.
The 11-year-old company operates an online bank and units specialized in fintech, digital cartoon and ride-hailing along with its KakaoTalk messenger. It stands today beside the largest business groups in South Korea, including Samsung, Hyundai, SK and LG, which are family-owned conglomerates known as chaebol. The firm with 118 affiliates last month set up its blockchain enterprise Krust and the nonprofit blockchain platform Klaytn Foundation in Singapore.