On October 15th, 2022, the South Korean messaging app KakaoTalk suffered a catastrophic outage from a server fire, leading to a multi-day blackout. The aftershocks of this disruption were widespread. Beyond the damage of some 32,000 servers (Byun), services like online payments and ride failing were halted for nearly all Kakao app users, accounting for over 90% of South Korea’s population. It even caught the attention of the federal government, as President Yoon called for swift resumption of services. Eventually the market value of KakaoTalk’s parent company, Kakao Corporation, stooped so low that the CEO at the time resigned.
ICT application outages are not a new phenomenon. Facebook’s parent company Meta suffered a similar outage in 2021, when not only its premiere social networking site went down for several hours, other services like WhatsApp, Messenger, and Instagram were also unusable during that timespan. Many company employees could not even enter their work buildings to fix the outage, as it also affected those electronic security systems (Heath 2021).
The consequences of these incidents have become more dire as ICTs like social networking site user bases grow into the millions and billions. Outages of ICT applications garner extensive reporting from users and media outlets due to the immediate communication-related consequences the masses endure. They too often lead to users unable to contact friends, loved ones, or business associates. Outages like KakaoTalk’s and Facebook’s document the fragile nature and fallibility of these seemingly impenetrable and secure infrastructures. For every notable outage, users are consistently reminded that no ICT service is too big to fail, and we must be weary of how much we rely on them for our everyday lives.
And yet, we continue to entrust our data and daily routines to them. These ICT apps, and the internet at large, are so ingrained in society that it may be easier to tolerate outages of these apps than learn to be less reliant on them. KakaoTalk’s user growth was ultimately not adversely affected. Over 90% of South Koreans still actively use the app on their smartphones (DataReportal) for internet-based messaging, but also for shopping, E-mail, mobile payments, and gaming. Kakao Corporation has sought and continues to expand their services further to music streaming, social networking, online banking, and mobile business. As put succinctly on Kakao’s “Services” page, “Kakao creates a better world.” Perhaps it’s more appropriate to say that Kakao is creating a Kakao World.
KakaoTalk’s growth and eventual monopoly are the result of decades of South Korean government policy and incentive for the country to improve its domestic ICT infrastructure. In this paper I will outline the 20th century policy decisions that led to Kakao Corporation’s outsized growth, the economic and social aspects of South Korea that allow it to endure and embed itself within the country’s ICT infrastructure and society, and propose potential futures for the Super App domestically and internationally.
A history of mobile and internet infrastructure in South Korea
The rise of Kakao in Korea must first be contextualized by post-war economic growth and industrialization. Following the Korean War in 1953, economic development was first state-led, spearheaded by policy, regulation, and centralization. Governmental hold actually did promote economic prosperity to a previously hardened country, as the regime’s agenda included expanding and modernizing the country’s exports (Jin 2017). The 20th century also witnessed the birth of the country’s leading technology corporations like LG in 1947 and Samsung in 1969.
However, it wasn’t until the 1980s when Korea made its pivot to a “knowledge-based economy centered on the development of ICTs” (Jin), leading to the domestic tech-forward society Korea is today. In fact, there are multiple points in the 20th century that enabled the aforementioned consumer electronics companies and eventually Kakao Corp. to be the dominant ICT companies they are today.
One was the promotion of domestic electronics exports. Specifically, the Electronics Industry Promotion Law passed in 1969 demonstrated South Korea’s agenda on more official and industrial levels. Their tactics included establishing the Electronics and Telecommunication Research Institute and even preventing some electronics imports, with the exception of R&D-related equipment. The government’s efforts even expanded into the private sector in the 1980s. They mostly funded industrial companies and private research institutes to fill the gaps of “technical and business experience” (Amsden 1989). So while Korea wanted to spread their telecommunications influence internationally, they also wanted to grow their knowledge from within and perhaps prevent an overreliance on foreign knowledge and imports. The electronics industry soon became the country’s strong suit, and it seemed that ICTs would be the ticket to post-war economic liberation.
The public control was not permanent. The transition to private control began in 1984 when mobile technologies were introduced to Korea. The government’s public telecommunications company, KT Telecom, still focused on wired phone technologies while the private firm SK Telecom monopolized the mobile market (Jin). Neoliberal policies then had to come into play.
In addition to deregulation of the telecommunications industry, Korea’s Ministry of Information and Communications established the Code Division of Multiple Access to standardize and enable the growth of the mobile industry and its technologies in 1994 (ETRI). But these government efforts, either intentionally or unintentionally, evolved into oligopolistic and even monopolistic tendencies of ICT companies.
The government sold shares of KT Telecom mainly to Samsung, LG, and SK Telecom to offset an economic downturn (Jin 2006). KT eventually reached full privatization through foreign company investment from the late 90’s up until 2002. Consequently, these major Korean telecommunication companies were dubbed as chaebol, or “family-controlled industrial conglomerate[s]” in Korea (Merriam-Webster). Conservative politicians and legislation encouraged this oligopoly through the approval of massive mergers (Premak 2017) of companies from industries like automation, A.I., analytics, and cybersecurity according to business information company Crunchbase with regard to Samsung.
In 2023, Korean ICT corporations are household names for consumer electronics. Samsung captures a leading 20% of global smartphone market share. LG continues to dominate the OLED TV market through an approximate 60% share (PR Newswire). Meanwhile, SK Telecom’s offerings have moved beyond wired and wireless telecommunication technologies. They now consider themselves an A.I. company and have penetrated into media, enterprise, the metaverse, commerce, and security industries. Kakao Corp. is following the same pattern of market share prominence by moving into other tech sub-sectors.
The notable, complementing piece of Kakao’s success is the investment in internet infrastructure by both the government and private firms. The Korean government began informization efforts in the 1980s as official policy. Internet infrastructure was and is Korea’s ICT-related strength becoming “one of the first countries to deploy the Internet” (Chon et al. 2013). In 1982, the country was also one of the first to develop an implementation of the TCP/IP internet protocol. Projects like the implementation centered around the introduction of computers and computer networks to administrative, financial, education and research-related government entities. Later on, the general agenda of the Korean government was to catch up to other countries’ efforts to build information infrastructure nationwide by utilizing new technologies in the 1990s (Lee 2021). From 1993 onward came a plethora of bureaucratic strategies and initiatives to establish a “digital government” (Chung, et al. 2022); the Basic Plan for Informatization Promotion, the Comprehensive Plan for the Development of the Information and Communications Industry, CYBER KOREA 21, the Ministry of Information and Communication (MIC), and the Basic Act on Informatization Promotion. Government policies to advance high-speed technologies did not face opposition by political parties, as there was societal and cultural consensus to transform Korea into a digital leader (Chung, et al.).
The Korea Information Infrastructure (KII) initiative applied internet services across the country with broadband, bringing internet speeds to previously unimagined thresholds. The project increased the demand for comprehensive internet services. The theme of early adoption persisted well into the 1990s, as the first internet cafés opened in 1995, one year after the opening of the very first, Cyberia in the United Kingdom (Huhh 2008). Korea also introduced some of the first massively multiplayer online games (MMORPGs) like The Land of Dangu in 1994 and Nexus: The Kingdom of the Winds in 1996. Naver, a Korean ICT company that provides internet search services, was founded in 1999, just one year after Google’s founding. In 2000, Korea became the first country to introduce Code-division multiple access (CDMA), which accommodated more internet bandwidth. By 2001, Korea was the top country of broadband users per capita (Chon et al.).
In the mid-2000s and early 2010s, digital governance continued to be an agenda item. The Act on Informatization was revised into the Framework Act on Intelligent Informatization in 2009, with the following purpose:
“…to contribute to realizing an intelligent information society, securing the national competitiveness, and improving the quality of life for citizens, by prescribing matters necessary to establish and promote policies related to intelligent informatization.”
South Korea today is noted as one of the most technologically advanced and innovative companies, and a “global powerhouse in science and technology” (OECD 2021).
These policy decisions, public initiatives, and private sector growth stints became influential events that led to Kakao Corp’s dominance in the 21st century. Kakao, through its own mergers and acquisitions, has become chaebol-like but cannot be officially labeled a chaebol because it is not-family owned (Premack). Instead, it has the monetary power to increase and maintain profits and the ability to continue buying companies, at least within the limits of the law. Brian Kim, the founder of Kakao Corp., has a resulting net worth of 12.9 billion USD as of 2021 (Bloomberg). While neoliberal policies related to deregulation were meant to increase private sector competition, it inadvertently created opportunities for unchecked market consolidation, especially under conservative administrations (Bae 2016). Kakao Corp. inevitably took the advantage.
KakaoTalk may have also benefited from early tech adoption and a South Korean preference for domestic electronics companies. While the first iPhones ignited a global shift to smartphones, local telecommunications companies like LG and SK Telecom accelerated their offerings of their own like Samsung Omnia, a smartphone introduced less than a day after the iPhone, and faster data speeds like LTE. Journalist Moon Ihlwan notes, “The big problem for Apple is simple. Koreans are more attracted to phones made by local consumer-electronics powerhouses Samsung Electronics and LG Electronics.” Also, public policy limited the market of smartphone companies that were not willing to adopt the Wireless Internet Platform for Interoperability (WIPI) software standard . Similarly, KakaoTalk was the app of choice for South Koreans who were more adverse to foreign ICT technologies and services. In a study about the use of KakaoStory, a social networking service within KakaoTalk, compared to a competitor like Facebook, “KakaoStory narrows the distance between people in a group and secures a form of closeness that creates boundaries between an individual’s group and other groups.” Facebook was more about connecting with people like celebrities. This difference in adoption was considered a tenet of Korea’s collectivist society (Lee 2017) and more broadly could be considered a reflection of South Koreans ability to, “…encode, communicate, and enact their values and practices,” as Briggle and Mitcham discuss about the relationship between information and culture. But in addition, Kakao has successfully transformed information into culture in the form of extremely popular emoticons. Kakao’s emoticons were introduced in 2011 and have become a defining visual feature of the app. They operate similarly to Emoji (users send each other these digital images to express information), with the exception that Kakao offers a massive marketplace for paid emoticons. A study found that Kakao emoticon usage was perceived to be a key to greater belongingness and inclusion for its users (Jung, et al. 2021) and therefore another example of South Koreans’ collectivist tendencies. The compensation for the multi-day outage? Free emoticons (Song 2023).
Is KakaoTalk infrastructure?
Just as Sandvig investigated the infrastructural nature of the internet, the advent and dominance of KakaoTalk is indicative of its foundational nature and embedment in Korean society. The media has expressed as much. Kakao’s services have been described as “de facto” (Sharwood 2022) by journalists and even “national” infrastructure by former president Yoon (Yoon So-yeon, et al.). While it may still be difficult to deem a single application as infrastructure, no matter its market share, there are definitely characteristics of KakaoTalk that make it infrastructural, at least conceptually.
Invisibility & human practices
The first noted characteristic of infrastructures noted by Sandvig is invisibility. The internet itself is perceived as immaterial, with buzzwords and terminology like “the cloud” and “hotspots” muddying its physicality, specifically the fiber-optic cables that run through the globe. The presence of smartphone applications, including KakaoTalk, operate similarly. Even though they may physically exist on a user’s device in the form of pixels, what users don’t see are the servers and connecting cables that utilize network protocols to deliver content, messages, service, and other offerings to one’s handset. KakaoTalk was invisible until it was literally set ablaze. That’s when Korean residents had to reckon with the app’s role in their daily lives.
The second dynamic of infrastructures Sandvig outlines, dependence on human practices, is also a defining feature of KakaoTalk. Peer pressure and first movers advantage lead to the aforementioned steadfast adoption of mobile phones in Korea and ultimately the messaging app.
Modularity
Interpreting KakaoTalk’s modularity, the third characteristic attributed to infrastructures, can be accomplished on both micro and macro levels. An exploration of the app itself reveals its evolution in utility. Early screenshots of the interface shows KakaoTalk as a simple messaging app, fit for the newly-introduced smartphone touchscreens at the time. Now, the app’s “More” portal shows other features like E-mail, calendar, and cloud storage.
But beyond the app’s capabilities is the ecosystem of electronic services Kakao Corporation has been able to build through various software developments and business mergers. There comes a sense of modularity with Kakao’s applications for a Korean user’s life. One could pick and choose apps that suit their needs; KakaoTalk for messaging, KakaoBank for online financial management, KakaoShop for online retail, and KakaoPay for instant money transfer, and others. Kakao apps could similarly be perceived as infrastructures that “… seem to be projects of a particular institution… such as Google or the Great Firewall of China” like Sandvig names.
To dive into this Kakao-Google comparison further, there is great evidence of, at the very least, a Western reliance on Google’s digital offerings. Americans and Europeans conduct web searches on Google 85% and 92% of the time respectively (Plantin et al. 2016). With interoperable apps like Google Sheets, Slides, and Docs, users have adapted to a web experience overwhelmingly facilitated by Google-related services. A paper, also co-authored by Sandvig, rightfully points out Google’s infrastructural nature given its simultaneous status as invisible and accessible. Should Google suffer a widespread blackout like Kakao, but more permanent, “…large numbers of people would find their lives substantially disrupted, with their email archives and addresses, documents, navigation, photos, and other critical records and services either entirely gone or requiring substantial effort to reconstruct,” (Plantin et al.). For millions, their online lives would be wiped out completely. And this does not preclude Alphabet Inc.’s other assets like YouTube and Android, whose services are also linked with Google functionalities.
This analysis offers multiple similarities to Kakao Corp., whose mergers and acquisitions increased its presence in other internet-related industries. In 2019 the corporation acquired Grip, which was the first Korean app to offer live streaming e-commerce (Koo 2021). They also merged with the Korean music streaming service Melon in 2017. At this point, Kakao’s services act as touchpoints for Koreans’ leisure and business activities. Should Kakao Corp shut down for good, we could reasonably anticipate a similar infrastructural meltdown.
Standardization
The fourth attribute, standardization, is apparent through Kakao’s app offerings visually and structurally. It’s very easy to tell which app falls under Kakao’s umbrella due to its bright yellow branding. Even if it doesn’t fit the parent company’s branding, like Melon, you can access the service by logging in with your KakaoTalk account. This is done through the authorization protocol OAuth (Aguirre), which is what Facebook and Google also use for single sign-on (SSO) capabilities. This protocol allows users to “prove their identity” without having to create a brand new account or share their password (Varonis).
KakaoTalk’s calling and messaging capabilities can only thrive off the standardization of communication protocols like Wi-Fi and VoIP and more broadly, the Internet Protocol. All of these protocols rely on the Internet Standardization process, which forms the internet practices that allow computers to interact with each other seamlessly and interoperably. The Internet Engineering Task Force (IETF) is primarily responsible for the “technical specifications” that allow KakaoTalk to offer its communication services without having to build their own infrastructure from the bottom up. In its rawest technical form, KakaoTalk is standardized from years of consensus-derived internet technology development.
Momentum
Finally, Kakao seems to have benefitted from momentum, the fifth attribute of infrastructures. KakaoTalk was released just one year after the iPhone was introduced in a country with “enthusiastic ICT consumers” (Jin) and strong domestic electronics companies. While Koreans ultimately opted to buy smartphones from Samsung more than Apple, sales within the country and globally decided that the smartphone was here to stay. But the other obstacle to Kakao’s eventual outsized market share was competition from other messaging apps like Line, WhatsApp, and even Samsung’s own messaging app ChatOn.
Kakao overcame the competition by positioning KakaoTalk as financially sound, easier to use, and more desirable socially. KakaoTalk was offered for free from the start, gaining an advantage over WhatsApp’s $0.99 price and the fact that mobile phone users had to pay for SMS texting. It also led the way for PC compatibility, beating out WhatsApp and Facebook in developing a desktop platform. In little time KakaoTalk benefitted from the network effect, as users quickly got their friends and family to download the app.
Inversely, Kakao may have stumbled over itself during its service blackout, as it incidentally called on Korean citizens to more closely examine their relationship with the corporation and its app offerings. Across many countries, people are overwhelmingly reliant on smartphones for information accession and transformation, so the use of applications does not seem to be going anywhere. Jin even describes KakaoTalk as “the most important social medium” on the smartphone, which is evident of Kakao’s success from taking advantage of the smartphone revolution of the early 2010s and the aforementioned Korean early-adopter culture. But the data center fire showed the company’s lack of foresight and logistical shortcomings, including an insufficient disaster recovery plan, which journalist Simon Sharwood pointed out as odd for a company of Kakao’s size.
Kakao as an ICT conglomerate seemed to have been destined. Decades of infrastructure investment foreordained its financial success. Yet, its cracks and limitations are starting to show. Current events both in South Korea and abroad may give us a hint into the future of Kakao Corp. and its technologies.
The future of KakaoTalk and “Super Apps”
The continuation of KakaoTalk’s dominance in South Korea is only somewhat shaky. Immediately after the news of the server fire and consequent outage, users jumped ship briefly and downloaded other ICT apps like Line and Telegram, with the latter being headquartered in Dubai (Yim 2022). However, the dip in usage was hardly a blip in KakaoTalk’s overall growth.
Since Elon Musk’s controversially single-handed acquisition of X, formerly Twitter, the billionaire has attempted to implement his agenda of his own “Everything App”, like KakaoTalk (Mac 2023). While the absence of a widespread Super App in the United States is notable, it’s currently difficult to foresee a successful future for Super Apps to penetrate the west. Kakao specifically has no aims to expand their app in the international market (Han 2021). WeChat is a similar Super App that only caters to users in China, so there is no anticipation of cross-pollination. Western users harbor similar feelings of apathy, with a bigger selection of messaging apps appealing more to foreign tastes (Jie 2023). And with only 2.25 million international users, KakaoTalk does not have that network effect on them. I do have KakaoTalk on my phone, but only text one friend rarely, as we fall back onto our mutual habit of using iMessage and other social networking sites.
The actual adversary to KakaoTalk’s success at present is the government crackdown on tech sector monopolies that companies like Kakao Corp. hold. President Yoon’s sentiment about KakaoTalk as infrastructure prompted a call for the corporation to back up its servers properly and his administration to find a better balance between a free market and fair competition. The Fair Trade Commission, the ICT committee, and the National Security Office began to investigate Kakao’s data management shortcomings.
This was not a new revelation. In 2016, the government put Kakao Corp. on its antitrust watch list, the first internet company sharing placement with Samsung and Hyundai (Korea Herald 2016). The government’s stated aims of including Kakao are to foster growth of smaller businesses (Kim 2016) and prevent a chaebol effect (The Economist 2021).
But despite growing regulations and general weariness of South Korea’s tech sector, the government still has not denied KakaoTalk’s place as national infrastructure. Therefore, a potential contradiction seems to take place. How can KakaoTalk take the place of KT Telecom as national ICT infrastructure without its monopoly? Governments around the world have had to reckon with massive ICT mergers and acquisitions that threaten a free market, but it has been difficult to transform that reckoning into action. And with Kakao Corp.’s proliferation into other markets, like entertainment with the acquisition of K-Pop company SM Entertainment and the production of Korean dramas by Kakao Entertainment, Kakao as a brand has successfully woven itself into Korean culture. So long as South Koreans buy into the brand and opt to use its services every day, it will continue to be difficult to loosen Kakao’s hold on the country.