Kakao's co-CEO steps down taking blame for massive service outage

Namkoong Whon, left, and Hong Eun-taek, co-CEOs of Kakao, bow their heads to apologize for service disruptions caused by a fire at a data center, during a press conference at the company's office in the Pangyo area of Seongnam, Gyeonggi Province, Wednesday. Yonhap

Company vows to overhaul data backup system to prevent another incident

By Baek Byung-yeul

Namkoong Whon, co-CEO of Kakao, stepped down on Wednesday to take responsibility for the recent service disruptions including its popular messenger app KakaoTalk due to a data center fire and vowed to complete a backup system within two months to prevent a recurrence.

“Currently, most of our services have been normalized. We have caused great inconvenience for a lengthy period of time as our response did not meet the expectations of users,” Namkoong said during a press conference at its office in the Pangyo area of Seongnam, Gyeonggi Province.

“I feel heavy-hearted when I think of users and our partners who use Kakao services, such as those who had difficulty communicating, drivers who could not receive calls and business owners who were unable to use our advertising channels. I also found that the concerns of the authorities are greater than ever. We will do our best to regain the trust of users,” he said.

Namkoong added he would resign from his co-CEO post and will serve as the head of its disaster response subcommittee, while Hong Eun-taek, another CEO of the company, will lead Kakao's emergency committee and remain as the sole leader.

On Saturday afternoon, a fire occurred at a data center of SK C&C in Pangyo, which houses Kakao's servers. The incident led to the disruptions of various Kakao services, including its messenger app KakaoTalk, for about 10 hours.

Hong said the service recovery took a long time as the tools to distribute the functions of the servers in Pangyo to other places were not properly set up.

“There is a system that automatically distributes servers. There are 32,000 servers in the place where the fire broke out. If the servers are out of power, they need to be booted. That's why it took a long time to recover,” Hong said. He added, “We will complete the data backup of developers' work tools and operation tools so this situation will not be repeated.”

Kakao said it will proceed with compensation as soon as it checks the kinds of losses incurred by the users of its paid services. For the users of its free service, such as KakaoTalk, the process will take longer, because the company said it will decide on compensation after checking the different cases.

“It is difficult to determine the size of the compensation, but it is not to the extent that the company won't be able to continue its business,” Hong said.

Due to the service outage, the operator of the country's most popular messenger app is expected to face backlashes not only from its users, but also regulators.

On Wednesday, the ruling People Power Party (PPP) and the government decided to strengthen mandatory measures for data backup at value-added telecommunications business operators such as Kakao and Naver.

Also, they will revise the Framework Act on Broadcasting Communications Development so that the government can designate private data centers as key national facilities.

The government is also moving to tighten scrutiny over the IT companies' market monopoly. The Fair Trade Commission (FTC) said on Tuesday that it is working on detailed regulations to prevent online platform operators from abusing their market dominance.

The antitrust agency's move followed President Yoon Suk-yeol's remarks on Kakao's service disruption.

“If the market is distorted or its service has almost the same role as a state-run infrastructure, the government should take necessary measures for the benefit of the people,” he said.