Korean regulator slaps $73,271 fine on Kakao for unfair biz practice

People walk in front of the head office building of Kakao in Seongnam, Gyeonggi Province, in this Oct. 16, 2022 file photo. Korea Times photo by Choi Ju-yeon

Korea's antitrust regulator slapped a 98 million-won ($73,271) fine on Kakao on Sunday for failing to notify users of the terms of unsubscribing from its music streaming service.

The decision came as the company, which has the country's major music streaming platform Melon under its wing, did not inform users that they could receive a partial refund when canceling their subscription plans, according to the Fair Trade Commission (FTC).

According to the FTC, Kakao categorized all unsubscribe requests as "general termination," resulting in users receiving no refund while maintaining services over the remaining period.

The commission said Kakao failed to adequately inform users about their available options and did not inquire about their preferences regarding unsubscribing, which is considered a "deceptive tactic."

"The FTC plans to continue to sternly address unlawful activities to set up fair business orders that meet consumers' needs," it added.

Kakao Entertainment, an entertainment arm of Kakao, refuted the FTC's ruling for lacking evidence.

"We provide the option for early termination of services through both online channels and consumer centers," Kakao Entertainment said in a statement.

Kakao Entertainment added that there is no conclusive evidence indicating that users were compelled to choose a specific cancellation option. (Yonhap)