September 14, 2021 12:56
The Fair Trade Commission is investigating Kim Beom-su, the founder and chairman of mobile messaging giant Kakao.
According to the FTC on Monday, inspectors from the anti-trust agency recently visited investment firm K-Cube Holdings for misreporting the status of Kakao's de facto holding company.
K-Cube Holdings is 100 percent owned by Kim and in turn owns 10.59 percent of Kakao, in which Kim personally has another 13.3-percent stake, giving him effective control of the publicly traded company.
Companies above a certain size are subject to special disclosure rules and anti-trust regulations. The FTC last week also said it is probing Kakao Mobility, which operates the cab-hailing service Kakao T, for matching users only with taxis that pay it a commission.
Also last week, the Financial Services Commission ordered Kakao Pay to stop recommending financial products after deciding that the practice constitutes illegal brokerage rather than mere advertising.
The ruling Minjoo Party has slammed Kakao's "indiscriminate expansion" and accused mobile platforms of trying to squeeze small businesses with their market-leading apps.
Kakao owns no fewer than 158 subsidiaries both in Korea and overseas. Small business owners have complained of gouging as Kakao and Naver try to monopolize every corner of online commerce, big or small.
Amid a concerted onslaught by financial authorities and lawmakers, Kakao's shared tanked dramatically last week.
Kakao is trying to think of ways to deflect the accusations, including creating a fund for small businesses and scrapping some of its more egregious business plans. Kim has already joined Bill and Melinda Gates' Giving Pledge campaign to donate half of his fortune or about W5 trillion to charity over the next couple of decades (US$1=W1,175).
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