Korea's dominant app operator Kakao faces chain lawsuits plus class action after system crash

South Korea’s Kakao Corp. faces chain legal suits for civil and criminal liabilities for the system breakdown in dominating messaging app and expansive mobile services from a data center destruction from a fire last Saturday.

At least 200 users have joined a class action lawsuit against the IT giant. Shin Jae-yeon, a lawyer from a local law firm LKB & Partners, who represent them, said he will categorize similar compensation cases to build up a damage claim suit against Kakao.

Kakao promised to provide compensation to its users during a press conference held on Wednesday. How much compensation can be awarded remains undecided, but Kakao is expected to mobilize its own financial resources first and then exercise the right to indemnity against SK C&C that housed Kakao servers destroyed in the fire.

Kakao’s top executives also face criminal charges as a civic group Tuesday accused Kakao founder Kim Beom-su, CEOs Hong Eun-taek and Namkoong Whon of obstruction of business, violation of the Consumer Basic Act, and dissemination of false information. Namkoong has resigned on Wednesday.

The civic group argues that the management neglected establishing a response manual even though they were fully aware of the circumstances that could cause a service disruption and inflicted economic losses on self-employed users by spreading false information that their service recovery is possible in two hours on the day of the accident.

Criminal liability may not stand.

Criminal law basically punishes intentional offenders, and even if it is negligence, offenders can be punished in case of injuries and death, said lawyer Song Deuk-beom, adding that it is also difficult to apply the charges of spreading false information to them just because service restoration was delayed.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]