The Fair Trade Commission filed an appeal to the Supreme Court on the 12th, contesting the Seoul High Court's ruling that canceled a penalty surcharge of 27.1 billion won imposed on Kakao Mobility regarding the alleged 'call allocation favoritism.' The penalty surcharge case from the Fair Trade Commission proceeds in order through the Seoul High Court and then to the Supreme Court.
The Fair Trade Commission imposed a penalty surcharge of 27.1 billion won and a corrective order on Kakao Mobility in June 2023.
Kakao Mobility’s Kakao T taxi calling service is divided into 'regular calls' where passengers do not bear a fee and 'blue calls' where passengers can bear a fee of up to 3,000 won.
Kakao Mobility has been accused of favoring franchise taxis, specifically 'Kakao T Blue,' in dispatching from the regular call service of the Kakao T application from March 2019 to April 2020. This was done even if non-franchise taxis were closer to the customers who called.
The Fair Trade Commission determined that Kakao Mobility gave preferential treatment to franchise taxis even for regular calls to increase the number of franchise taxis, thus imposing the penalty surcharge and corrective order.
In response, Kakao Mobility filed an administrative lawsuit requesting the cancellation of both the corrective order and the penalty surcharge. Kakao Mobility asserted that 'the dispatch logic of Kakao T reflecting the acceptance rate of taxi drivers aims to enhance consumer convenience, not to favor franchises.'
The 7th Administrative Division of the Seoul High Court ruled on the 22nd of last month to 'cancel all corrective orders and penalty surcharge payment orders issued by the Fair Trade Commission against Kakao Mobility.' The court stated, 'From Kakao Mobility's perspective, franchise and non-franchise drivers cannot be viewed as equal trading partners,' adding that 'the act in this case (call allocation favoritism) does not constitute unfair transaction condition discrimination.'
The Fair Trade Commission's appeal to the Supreme Court against the Seoul High Court's ruling is reportedly intended to clarify legal precedents regarding criteria for judging unfair practices that utilize algorithms.