Photo = Kakao Mobility

 

[Alpha Biz= Paul Lee] Kakao Mobility and its executives have denied all charges in their first court hearing over allegations of abusing their dominant position in the taxi-hailing app market.

The Seoul Southern District Court held the initial trial on March 27 for the company and three executives, including CEO Ryu Geung-seon, who have been indicted on charges of violating the Monopoly Regulation and Fair Trade Act.

Prosecutors allege that between February 2021 and December 2023, Kakao Mobility leveraged its dominant position in the taxi app market to demand sensitive business information—such as departure and route data—and commission payments from four competing small and mid-sized franchise operators.

The company is also accused of blocking taxi drivers affiliated with those competitors from accessing its platform if they refused to comply, thereby unfairly restricting their business activities.

During the hearing, prosecutors argued that the defendants conspired to force competitors into partnership agreements involving fees or data sharing, and imposed disadvantages on those who declined, ultimately disrupting fair trade order.

Kakao Mobility and its executives stated that they “deny all charges.”

Authorities previously assessed that Kakao Mobility holds approximately 95% market share in the mid-sized taxi app dispatch segment, giving it significant market dominance.

According to prosecutors, the company devised the strategy around December 2020, citing concerns such as brand confusion, and demanded fees—reportedly two to three times higher than standard franchise fees—while seeking to utilize the acquired data to enhance services such as navigation.

Prosecutors claim the alleged conduct caused substantial damage to the market. Drivers who were blocked from general dispatch services reportedly lost an average of KRW 1.01 million in monthly income. In one case, a competing operator saw its affiliated fleet halve during the period of blocking, eventually forcing it to exit the mid-sized taxi franchise business.

Separately, a 2023 case referred by the Fair Trade Commission over alleged preferential dispatching to affiliated drivers was dismissed, with prosecutors concluding that the legal basis for charges was insufficient.

The next hearing is scheduled for June 9 at 3:00 p.m.

 

 

 

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