The Republic of Kakao goes on hiatus: The public cost of platform monopolies in South Korea

Abstract

In the wake of the recent nationwide service outage of Kakao, this article questions the cost that the Korean public may have to bear when private platform monopolies imbue all facets of public lives. Using cultural political economy as both a theoretical framework and a mode of inquiry, it seeks to unravel the ways in which platform monopolies are legitimized and defended by a mix of institutional, regulatory, and discursive forces. Findings reveal that Kakao’s proprietary digital platforms and their services are not only justified by dominant political–economic forces, but also discursively appropriated by themselves and the government for the purposes of driving innovation, elevating national competitiveness, and promoting economic growth, yet at the expense of public scrutiny and accountability. The article concludes by briefly evaluating the implications that these unwelcoming trends have for the Korean public.

Introduction

October 15, 2022. It was the day that much of the Republic of Korea (hereinafter, Korea) ceased functioning, due to a fire in Kakao’s de facto sole data center in the outskirts of Seoul (J. Lee, 2022). As a super app, which Steinberg (2020) defines as “the do-everything platform for everyday cultural and economic activities,” Kakao has evolved from a third-party mobile messenger app to one of the largest chaebols, family-owned business conglomerates, in a bit more than a decade. Its messaging service named KakaoTalk constitutes a textbook example of monopoly with its market share of 98% in terms of usage time (Hong, 2022). Kakao’s reach in Korea is unparalleled, as its ever-expanding services incorporate almost all facets of the people’s tech-driven daily lives, including messaging, e-commerce, mobile banking, games, maps, education, entertainment, mobility, and many more.

Naturally, the Kakao outage, which lasted for more than 10 days for certain services, caused immense disruptions in Korean society at large. As the New York Times reports, when the kookmin messenger (i.e., people’s messenger) became dysfunctional, people’s lives were literally “put to a halt,” not being able to pay for taxi fares and restaurant bills, or to use many commercial and governmental services that rely on Kakao’s platforms (Chang & Jin, 2022). In the wake of this, all major news outlets, ranging from the left to the right, blamed Kakao for their reckless expansion, irresponsible data center management, and poor crisis management, while a small number of conservative economic dailies still sought to defend the very foundation of the platform economy, an unregulated free market (J. Park, 2022).

Facing the unprecedented level of public outcry and the escalating pressure for government regulation, Kakao embarked on massive crisis management campaigns, promising to build more robust backup and recovery systems to prevent future disruptions (Baek, 2022b). In addition, they pledged to compensate individuals and small businesses for their losses resulting from the Kakao blackout. Yet the compensation they offered was dismal, to say the least. For instance, KakaoTalk “decided to offer up to 50,000 won (or $38.33 USD, according to the August 5, 2023 exchange rate) to small business owners, along with free emoticons for every user of its messenger service, KakaoTalk” (Baek, 2022a). It was millions of taxi drivers, food delivery riders, and small businesses who had to take a direct and devastating hit from the outage, while the platform giant was staging quick, knee-jerk public relations stunts.

As is the case with any crisis with this magnitude, intense debates ensued as to the cause of the fire, the inexcusable inadequacy of data center management, and regulatory consequences. While the primary cause of the outage may not have been preventable, the ways in which Kakao, the Korean government, and responsible regulatory authorities prepared for a potential crisis was utterly unacceptable. While the risks of Kakao’s unhinged growth have been lurking in the shadows for a long time, proper regulation and public scrutiny took a back seat to the rosy yet heedless projections of innovation-driven platform economy. As Moore and Tambini (2021) rightfully argue, unregulated platform monopolies have become a serious threat across the globe, “not only by increasing inequality but also by undermining” the infrastructure and networks of public communication (p. 1). They also tend to exacerbate the conditions of the so-called gig economy workers (Vallas & Schor, 2020).

Hence, the Korean governments, liberal and conservative alike, over the past two decades are also responsible for maintaining overly lenient regulatory stance toward digital platforms. Kakao’s monopolization of many digital platforms in Korea raises a serious question about various negative externalities that un(der)regulated platform monopolies can create. It becomes crucial then to examine specific ways in which platform monopolies are legitimized and promoted via institutional, political, and discursive forces in the name of promoting innovation and other ideals, yet at the expense of public scrutiny.

Theoretical framework: cultural political economy of platforms

To examine how Kakao has grown rapidly to monopolize, initially Korea’s instant messaging app market and progressively other digital sectors, this article employs cultural political economy as a guiding theoretical framework, for it helps effectively address the posed questions in a critical and context-specific manner, while avoiding analytical reductionism, whether it be political, economic, or communicative/linguistic.

Evidently, platforms have become a defining feature of contemporary capitalism, and its salient characteristics, mechanisms, and influences are often called differently by such neologisms as platform capitalism (Srnicek, 2017), communicative capitalism (Dean, 2003), and surveillance capitalism (Zuboff, 2019), to list a few. Regardless of different labels, they all point to one fundamental logic of contemporary capitalism: aggressive yet effectively hidden user data extraction from digital infrastructures, including social media and Internet-based apps, and the use of them for various profit purposes. Platforms, in their simplest sense, can be defined as “digital infrastructures that enable two or more groups to interact” (Srnicek, 2017, p. 43). In a similar fashion, Hovenkamp (2021) defines a digital platform as “a website, app, or other digital venue that interacts commercially with one or more groups of users” (p. 1957). Yet the actual ways the term is deployed vary widely and they carry out certain different economic, cultural, and discursive goals (Gillespie, 2010).

In explicating the mechanisms of platforms in the context of capital accumulation, critical social theories of social media in general and the political economy of the media in particular provide a perceptive theoretical framework. According to Fuchs (2020), means of communication, such as Facebook, Instagram, WhatsApp, and KakaoTalk, have now become a major means of production as well as a main enabler of capital accumulation. Other scholars (Couldry & Mejias, 2019; Dean, 2003; Srnicek, 2017) have also analyzed how human interactions and experiences are repackaged in the forms of an unimaginably large amount of data and how they are appropriated and exploited by digital infrastructures that are owned and controlled by a few big tech corporations. Furthermore, Duffy’s (2017) extensive empirical work on the work and lives of free content creators—such as fashion and beauty vloggers—unmistakably demonstrate the often glorified yet inherently exploitative nature of the platform-based gig economy.

This political economy approach, however, alone may not be sufficient in understanding and critiquing the negative effects that the gigantic platforms have on the public. The new phase of capitalism is now supported increasingly by invisible labor by an incalculable number of ordinary users and this communicative, immaterial, and unremunerated labor is presented as something fun, enjoyable, voluntary, and all self-fulfilling by the platforms that inherently exploit their users (Nam, 2020, p. 422). In other words, not only are platforms a means of production, but they are simultaneously a means of communication, a means of self-expression, a means of cooptation, a means of legitimization, a means of social engineering, and ultimately a means of capital accumulation. When these different mechanisms and goals are blended together on platforms, it becomes harder to target specific areas and ways of regulating them.

With this new challenge in the age of platform capitalism, this article uses cultural political economy to examine the public cost of private platform monopolies in both institutional and discursive terms. In a nutshell, cultural political economy seeks to “combine the analysis of sense- and meaning-making with the analysis of instituted economic and political relations and their social embedding” (Sum & Jessop, 2013, p. 1). To put it differently, cultural political economy looks critically at the norms, sentiments, and structures of language that structure and influence economic practices and, in turn, it examines how these economic forces shape, legitimize, and reinforce dominant discourses. Thus, it departs from liberal, rationalist, free-market economic theoretical approaches to offer relational, realist, and power-centered accounts of certain specific practices and manifestations of social norms, discourses, institutions, and regulations (Sayer & Morgan, 2022).

This theoretical framework will be useful in analyzing the Kakao case, as it enables to examine the confluence and divergence of the state, the platform economy, and the public interests by looking at how the state helps promote private interests via various institutional and regulatory interventions, while simultaneously keeping a critical eye on the roles that discourses play in forging and reproducing ever-shifting relationships between the state and the neoliberal agenda. Of particular interest here is the type of cultural political economy that stresses the importance of taking a critical look at the systems that are “responsible for economic and cultural effects” including public discourses, while being open to the possibility of discourses disrupting dominant systems (Sayer, 2002, p. 687). In other words, the efforts to put “culture in its place in political economy” (Sum & Jessop, 2013) must not lead to the reactionary discursive reductionism that is blind to the continued yet evolving systems of capital accumulation and uneven power relations in society. In a sense, critical cultural political economy can help bridge “the mythical divide” that has long existed between critical political economy and cultural studies in media studies scholarship (Fenton, 2007).

Specifically, cultural political economy can help this research in a number of ways. First, it helps analyze the interplay between the political economy of Korean information and communication technologies (ICTs) and the state-initiated, developmental economic discourses. Second, it allows to examine the role of language in various contexts of power. Cultural political economy would help reveal how such notions as innovation, competitiveness, and economic growth have been appropriated by different players to advance their material interests. Third, it helps to reassess the role of the state in accelerating the trend of platform monopolization. Although the new phase of the post-Fordist, information-based economy is often believed to weaken drastically the power and sovereignty of individual national states, this article takes a more nuanced, context-specific approach to reveal the otherwise increasing level of collaboration between the neoliberal, growth-obsessed state and local platform monopolies such as Kakao. Finally, cultural political economy may help envision alternative policy discourses by linking its findings to critical policy studies in a critical-pragmatistic manner, as advocated by Fairclough (2013a).

Therefore, the main question arises: How does the recent Kakao outage illustrate the danger of unregulated platform monopolies? In unpacking this overarching question, this article investigates more focused questions to offer a distinct yet interrelated set of answers. Those include: How has Kakao’s free messaging app been used as a loss leader to entice users into other profit-making apps and services? How are platform monopolies in Korea legitimized by both political–economic and discursive forces? What implications do all these draw for regulating platform monopolies?

Methods

The rapid growth of Kakao in Korea was not a fortuitous event. Rather, it was a result of specific technological deployments, certain business choices, particular policy arrangements, and people’s cultural choices and experiences. In investigating Kakao’s much touted yet questionable trajectory, not only is cultural political economy a perceptive theoretical framework, but it is also an effective mode of inquiry. In fact, it has been used across many disciplines, for instance, to uncover how the notion of national competitiveness was constructed both institutionally and discursively among Asian nations (Sum, 2015), to reveal the ideological functions of the dominant peace education (Higgins & Novelli, 2020), to unravel the interconnectedness of societal power relations in the case of urban heritage tourism (Su et al., 2018), and to reconstruct the history of Chinese gaming and live streaming culture in the context of digital platforms (Wang, 2022).

Therefore, cultural political economy enables to untangle Kakao’s success as both institutional, regulatory practices and economic imaginaries. For this study, it allows to combine a political–economic analysis of the Korean platform economy and a critical analysis of dominant corporate and governmental discourses that helped serve Kakao’s interests. For the former, pertinent economic data with consideration to Korea’s shifting political contexts are used to construct an overview of Kakao’s quick ascendance in the Korean platform economy. Economic data are obtained from Korean government ministries and agencies (e.g., Ministry of Science and ICT and Korean Fair Trade Commission), and major Korean dailies and news portals (e.g., Yonhap News, Dong-A Ilbo, and Daum Finance). For the latter, a critical discourse analysis is used to examine such discursive sources as Kakao’s corporate documents, government policy reports, and congressional hearings, among others. The primary time period for the analysis is from the start of the former Moon Jae-in administration to the present, 2017–2023.

The type of critical discourse analysis this study employs is largely informed by Fairclough and Wodak (1997), which stresses the role of language and discourses in creating and sustaining unequal power relations. Their critical discourse analysis focuses on the linguistic, discursive “character of social and cultural processes and structures” (p. 271), and it seeks to deconstruct “relations of power,” as enacted, legitimized, and reproduced in and by various discursive materials. In other words, “the situational, institutional, and social settings shape and affect discourses,” while discourses simultaneously “influence discursive as well as non-discursive social and political processes and actions” (Wodak, 2001, p. 66). Therefore, it is always concerned with analyzing how certain ideals, values, or dominant ideologies (e.g., nationalism, peace, racism, technological progress, and so on) are legitimized with regard to hegemonic power relations, rather than focusing purely on linguistic or textual properties in isolation. In sum, a critical discourse analysis that this study uses is macroscopic and thematic, as opposed to microscopic and syntactic.

Furthermore, cultural political economy grants an opportunity to envision alternative policy interventions in a critical pragmatistic manner. As Gillespie (2010) acutely notes, the term platform in itself “is drawn from the available cultural vocabulary by stakeholders with specific aims, and carefully massaged so as to have particular resonance for particular audiences inside particular discourses” (p. 359). After all, cultural political economy is very adept at uncovering the discursive dimensions of policy practices, while still maintaining a critical stance toward the material relations that ultimately undergird the unequal power relations in place (Fairclough, 2013a).

The political economy of the Kakao republic

As Steinberg (2020) stresses the need for considering “regional particularities of platforms” (p. 1), Kakao’s beginning, reception, and rapid expansion should be examined with regard to Korea’s political economy in the IT industry, policy arrangements, and government interventions or lack thereof. On that basis, this section presents a brief analysis of how Kakao has grown into a major conglomerate with many market-dominant platforms.

Although Kakao’s corporate history can be traced back to as early as 1995, it was not until 2010 when KakaoTalk (better known affectionately as KaTalk by Korean people), a new over-the-top mobile messenger app, was introduced (Kakao, n.d.-a). Since then, KaTalk helped its parent company of Kakao grew tremendously as one of the major conglomerates in Korea. As Kakao’s flagship service, both literally and symbolically, KaTalk helped Kakao turn a profit in 2012 for the first time, and ever since then it has been serving its role as a loss leader extremely well. By the end of the third quarter of 2022, more than 92% of Korean people used KaTalk to go about doing their daily activities (Sun, 2022). Although it still remains a completely free service and does not offer any paid plans, almost all Korean people are now effectively enclosed into Kakao’s many profit-seeking platforms, thanks to KaTalk’s omnipresence. In other words, KaTalk’s free messaging service serves as a gateway to the endless ocean of user data about human communication, social networks, purchase behaviors, and more. For example, Talk Biz, a KaTalk-embedded business application, alone was able to generate the revenue of over US$2 billion in about one and a half years (D.-H. Kim, 2022). This example shows clearly how Kakao has been able to expand their businesses exponentially, on one hand, by maximizing KaTalk’s network effect and, on the other, by spinning off services that take advantage of KaTalk’s market dominance. Using its more than 47 million user base in Korea, Kakao started numerous new companies and services, including Kakao Mobility, Kakao Pay, Kakao Games, Kakao Bank, Kakao Enterprise, and Kakao Entertainment, just to list a few. Korean people use Kakao’s platform-based services to call a taxi, to play mobile games, to deliver flowers to someone, to pay for a restaurant bill, and many more.

Korea’s IT ecosystem can be characterized as a duopoly involving two mega players, Kakao and Naver. Whereas its rival, Naver, focuses on its search platform and associated services, Kakao’s revenues are essentially based on the massive number of users it was able to attract via KaTalk. Although KaTalk users do not necessarily generate massive profits from their daily use, their incessant exposure to targeted advertising and associated services was what ultimately drove Kakao’s unprecedented growth in the Korean IT industry. This duopoly has been constantly supported by the current and past administrations. Using their 98% market share of the overall messenger use time in the case Kakao and close to 63% of Korean search market share by Naver (Dighty, 2023), these duopoly giants have been ceaselessly growing over the past two decades. Although they both like to position themselves as innovative and socially responsible companies, they are often charged with their anti-competitive, predatory practices such as aggressive mergers and acquisitions, self-preferencing of their own products and services, discriminatory treatments against smaller, newer competitors on their platforms, and bundled sales of their services to small businesses.

At one point, Kakao had a total of 187 companies under its corporate umbrella (S. Lee et al., 2022) and as a result its business areas include nearly everything imaginable in people’s daily lives. According to Korean Fair Trade Commission (2022), Kakao is listed as the 15th largest conglomerate in terms of its annual revenue size with about US$5.5 billion. It is also ranked the 13th in terms of market capitalization as of 5 August 2023 (Daum Finance, n.d.), and is now part of the new acronym NaKaLiCouBae (Naver, Kakao, LinePlus, Coupang, and Baedal Minjok), a Korean equivalent of FAANG (Facebook, Apple, Amazon, Netflix, and Google), that Korea’s highly educated young generation is eager to land a job with. One of Kakao’s newest additions, KakaoBank’s net profit jumped 29% to all-time high in 2022 and many other newly created enterprises with a Kakao imprint plan to offer IPOs in the Korean stock market (Yonhap News, 2023). Yet Kakao’s full-speed growth left little to no room for public scrutiny. Despite its self-proclaimed image as an innovative and entrepreneurial organization, Kakao is not much different from traditional chaebols, such as Samsung and Hyundai, in terms of its ownership structure and reckless expansion at the expense of public interests (S. Park, 2022).

Today’s information capitalism is inseparable from financial capitalism (Fine, 2016). Considering the fact that Korea’s National Pension Service is one of the major shareholders of Kakao, the recent national blackout and its aftermath can be seen as a revealing case in which private interests are continuously buttressed by the public in the name of innovation, economic growth, and ill-defined public interests, whereas a large majority of the quick gains in the stock market easily return to platform owners. Although Kakao’s share prices went down drastically to 47,300 KRW at one point after the outage, it is now rebounded to 53,900 as of 7 August 2023 (Daum Finance, n.d.).

The success of Kakao would not have been possible without numerous legal and legislative aids it has received over the years, often times unconditionally. In fact, Kakao grew most exponentially during the former Moon administration between 2017 and 2022, whose economic policy priorities, ironically, were to dismantle the collusion between the state and chaebols, and to promote small- and medium-sized businesses by properly regulating big businesses. President Moon went all in for Kakao and other IT giants to leave quick, visible marks on his economic achievement charts. During his presidency, a total of 44 cases of mergers and acquisitions by Kakao was swiftly approved by the Korean Fair Trade Commission (S. Kim, 2021). Furthermore, Korean native platforms, as opposed to global or American ones, often times received a myriad of favorable regulations in the name of promoting Korean national economic interests (Ministry of Science and ICT, 2022). Indeed, all the administrations’ IT policies over the past two decades, whether liberal or conservative, were akin to this drive, and it continues to dictate the current Yoon Suk Yeol administration’s policy with regard to platforms. For example, a number of laws that are designed to promote platform-supported businesses and public–private partnerships via proprietary platforms are set to be introduced soon (Ministry of Government Legislation, 2023). While a continuous stream of platform-friendly laws and regulations have been introduced, Kakao’s many reckless, irresponsible business practices remained largely unquestioned. It also must be noted that Kakao’s dominant position is well sustained through the revolving-door phenomenon. Over the years, many presidential staff members and high-profile officials have been recruited from major IT companies including Kakao and Naver, and, in turn, many ex-officials quickly became part of the companies that they previously were charged to oversee.

The brief political economic analysis presented here shows that Kakao has grown rapidly, thanks to the Korean public as a whole. That is, they have been subsidized by the public in many different ways: the public’s tax money used to build Korea’s advanced Internet and digital infrastructures, the massive number of users that helped maximize Kakao’s unmatchable network effect, and the endless amount of voluntary, unremunerated labor in the forms of messages, blog posts, comments, and feedback by more than 47 million users and their exposure to constant commercial messages. With its monopolistic dominance in the Korean platform economy, Kakao enjoys a perfect trifecta of profit sources including data extraction, targeted adverting, and unremunerated labor. The landscape of Korean platform monopolies is likely to remain intact unless major reforms and regulations take place. It was not until the recent outage that the Korean public realized how risky it can be to let a single private company control much of the digital infrastructure that they have to rely on in their daily lives.

In sum, this brief political–economic analysis of Kakao’s rapid ascendence affords the following critical discourse analysis. The institutional and regulatory structures summarized above serve as the “fields of action,” to use Wodak’s (2001) term, in which “a complex bundle of simultaneous and sequential interrelated linguistic acts” are manifested, thereby legitimizing and reproducing peculiar forms of argumentation, for instance, about the formation, role, and indispensability of platform monopolies, such as Kakao.

A critical discourse analysis of Korean platform economy

In addition to the political–economic forces, Kakao’s rapid ascendancy has been closely intertwined with discourses that helped legitimize and reproduce such material forces. The public makes sense of important issues through discourse. Discourse can construct a reality, speak to that reality, and help sustain the material conditions of that reality (Fairclough, 2013b). While discourse can be analyzed both as a macro-level institutional practice and as a micro-level semiosis, this brief critical discourse analysis focuses more on the former to reveal how dominant discourses help justify and serve various administrative, institutional, and economic goals. While by no means an exhaustive list, the following section presents some of the most salient discursive themes surrounding Kakao’s dominance.

Concession of the public to private platforms in the name of innovation

Through discourse, different actors compete to ascribe different conceptions, interpretations, and manifestations to innovation (Avgerou & Bonina, 2020). In general, a type of innovation that has been guiding the Korean platform economy is fundamentally a neoliberal one that serves the interests of dominant, anti-regulatory, free-market ideologies at the expense of public interests. Such narrow approach tends to focus primarily on the commercial potential of platforms, but it fails to consider the negative externalities that proprietary platforms can easily impose on the public.

While the notion of innovation for the public’s benefits has been increasingly prominent in public policy discourses, neoliberalism has been largely successful in defining what the public’s best interests are in its own terms. This unwelcoming tendency has been exacerbated in the age of platform capitalism as commercial platforms are used increasingly more for many social, public programs in terms of their communication campaigns, community engagements, policy implementations, and more (Plantin & Punathambekar, 2019). As nation states continue to embark on this accelerating trend of the state-platform partnership, an inevitable consequence of platform monopolization/conglomeration becomes evident across Asia (Steinberg et al., 2022).

In the discourse of Korean government, innovation via platforms has been articulated as one of the most efficient, impactful solutions to a wide array of social issues and challenges. Innovation is construed as an unfailing economic concept as well as an indisputable moral obligation of the government. As such, the discourse of innovation focuses chiefly on such benefits as convenience, efficiency, network effect, and value creation. In this discursive milieu, the term platform in itself is easily equated with proprietary platforms such as Kakao and Naver. Capitalizing on this, Kakao prides itself in saying that its mission is to bring about “technology innovation for shared growth.” It goes on to say that it seeks to make people’s lives more convenient and realize a more transparent and safer Internet-based society (Kakao, n.d.-b). Yet the recent preventable service failure shows unmistakably how empty their promise was, and how feeble their infrastructure and systems were to realize such noble missions. When their platforms ceased functioning, not only did Korean people’s daily routines become inconvenient, but many governmental services had to be suspended.

Korean government’s strong desire to take advantage of platforms is apparent. For example, the immediate former President Moon Jae-in’s Ministry of Economy and Finance (2018) used “innovative platform” as one of its major guiding economic principles, but what precisely innovation meant, and how privately controlled platforms could help promote meaningful innovation were hardly discussed in the report. Instead, it just listed industries and businesses that are supposedly to benefit enormously from the administration’s push for the overly broad, ill-defined “innovative platform economy.” Those include big data, artificial intelligence, bio health, blockchain, hydrogen energy, and other futuristic-sounding lingos. Furthermore, the Moon administration compiled 100 best practices of innovation in governance and public policies every year. Many examples of innovation listed in those annual reports were essentially about linking government services to commercial platforms by Naver and Kakao, and the sole justification was people’s familiarity with them (Ministry of the Interior and Safety, 2022, p. 99). For example, a best practice cited in the 2022 report was the use of KakaoMap to collect and publicize people’s mobile data about their visits to restaurants and elsewhere. While this was touted as an innovative use of platforms in mitigating the spread of COVID-19, such critical issues as unauthorized government surveillance and privacy infringement were never raised. Korean government’s discursive construction and practices of innovation are largely limited to and locked in the logic of platform capitalism. This tendency is exacerbated during the pandemic by authorizing ICT companies the extra power and letting them use that power for their economic and financial gains (Y. Kim, 2022).

The current Yoon Suk Yeol administration’s approach is not any different from his predecessor. Well in advance of his inauguration, President Yoon formed a new presidential committee to advance “AI-based digital platform governance” (Ministry of Economy and Finance, 2022). The committee was tasked with collaborating with platform giants and public sectors to address some of the most challenging issues that Korea faces, including health, education, public safety, and environmental protection. During his speech at the 2023 meeting of the World Economic Forum, President Yoon proclaimed that his government “aims to create a digital platform government that marries government-owned data and private sector’s services . . . Based on the private sector’s creative ideas as well as innovative technologies . . . we will radically upgrade administrative services” (Yoon, 2023).

This discursive practice that encompasses both innovation on platforms and innovation via platforms is simply a reverberation of Moon’s innovative platform policy and through it, platforms are presented as a panacea to complex social and economic problems. When Yoon administration introduced a new website to publicize successful cases of innovation in governance, ranging from vaccination, to policing, to custom enforcement, and to sexual crime monitoring, many of those cases used commercial digital platforms by Kakao, Naver, and others (Hyucksin 24, n.d.). With continued, unreserved support from the government, Kakao has been able to enclose many public sectors into their platforms. To promote their platforms in the name of innovation in governance, Kakao Enterprise (n.d.) uses slogans that clearly designates their specific platforms: “innovation in customer service via Kakao i Connect Talk, innovation in the work of public officers via Kakao Work, innovation in public information systems via Kakao i Cloud.” Public services are now increasingly relayed to Kakao for the sake of promoting efficiency and innovation. The converging trend of privatization–platformation–monopolization takes place in the void of much needed regulations, which would allow multi-homing, data portability, and data transparency for the public.

Needless to say, commercial platforms benefit greatly from the public digital infrastructures that they use to provide their services. In the dominant discourse of innovation, this relationship is often reversed, with platforms constructed as a great benefactor helping consumers with their free service, and helping sluggish public sectors with their fast and smart solutions. Thus, innovation is now presented as a Hobson’s choice, as if choosing to regulate platforms will only lead to the jettisoning of innovation altogether. While the neoliberal, tech-utopian version of innovation that stresses the role of platforms is continuously reinforced, the type of truly disruptive innovation that would dismantle the status quo is effectively depressed.

Platform economy as a path to national competitiveness

A race to national competitiveness is nothing new, as can be evidenced by the United States and the former Soviet Union space race during the Cold War, patriotism-filled international sporting events, or the recent diplomatic war over banning social media apps and artificial intelligence development. For instance, when Elon Musk and others called for a pause on further advancements in AI development, it was seen as benefiting China, while hurting American national competitiveness (Aitken, 2023). The rise of neoliberalism in the early 1990s expedited this by playing “a critical role in promoting now taken-for-granted imaginaries of the global economy as an economic ‘race’ between nations-as-platforms-of-production” (Linsi, 2020, p. 855). Nation states in today’s knowledge-based economy, which is undergirded by ICTs, platforms, and creative industries, are now repositioned as an active player, rather than a passive victim, in the interconnected global economy. Thus, the notion of competitiveness can be seen, according to Sum (2015), as “a knowledge brand” that is composed of “a set of hegemonic meaning-making discourses and linked dispositives promoted by” policy elites, corporate think tanks, the media, and nation states. The discourse of competitiveness can help normalize certain acceptable economic choices and policy arrangements and, as a result, it can legitimize “power to intervene and regulate lives in a market-friendly direction” (p. 220).

Ever since the first civil president Kim Young-sam in 1993 pledged to promote the media and ICTs as a new driving engine for the Korean economy in the age of globalization (Nam, 2008), enhancing Korean national competitiveness, using all possible means, continues to define the media, cultural, and IT policies, whether they be for cable, satellite, the Internet, big data, artificial intelligence, or anything newer. The Korean Wave phenomenon can also be understood in terms of Korea’s tireless quest for a first-class country in the world, which Guardian termed the “K-everything” phenomenon (Adams, 2022). Hence, boosting national competitiveness has also become a modus operandi of the platform economy.

In fact, the past Moon administration’s innovative platform policy construed innovation as a major way to elevate national competitiveness. Although the liberal administration’s proclaimed policy was toward tighter regulations on big businesses, it did not hesitate to make exceptions for digital platforms. In a speech, Moon said, “We have to accelerate our efforts at regulatory innovation. We have to work together to make sure new technologies and new industries become a new engine for our economic future” (Office of Government Policy Coordination, 2020). Moon’s cabinet also liked using platforms as a means to enhance national competitiveness, for example, by inviting Kakao to their meetings and praising them for their role as a trailblazer in exporting K-products through their platforms. In one such meeting, the Minister of Culture, Sport and Tourism commended Kakao by saying that well-made contents’ values can be maximized through platforms and they are a new engine for the Korean economy. A Kakao representative responded that Kakao would help build “a global Silk Road” for the K-story (Jang, 2020).

The current President Yoon echoes his predecessors’ fixation with national competitiveness. He does not hesitate to present himself as the “Republic of Korea’s No.1 salesperson” and on numerous occasions, when he met with global leaders and chief executive officers (CEOs), he used the phrase to sell Korean economy and its products. He makes it clear that his government seeks to make Korea “the world’s top digital nation, using digital technologies to enhance industries’ competitiveness” (“Yoon Vows to Raise,” 2022). Yoon’s deregulatory, platform-friendly policy is hard to miss. Until the recent outage that made Yoon reconsider its overly hands-off approach (Yonhap News, 2022), he maintained a pro-market self-regulatory approach to platforms for the sake of fostering world-class Korean “native” platforms (Ministry of Science and ICT, 2022). It is not surprising to see that, in the context of post-Fordist, ultra-competitive global economy, Kakao has become a source of national amour-propre for Korean people with its affable emoticon characters. Their innocent, comical, and jovial images even serve as a new ambassador for the Korean Wave (Cho, 2020). Often times, Korean platforms are framed as a David fighting against the Western Goliath (J. Park, 2022). In this discourse that prioritizes national competitiveness at all costs, many responsibilities that the republic of Kakao has neglected for a long time remain unquestioned.

As Krugman (1994) rightfully contends, national competitiveness can become a “dangerous obsession,” rather than a positive economic motivator, for it tends to expound the roles and responsibilities of the state in narrow economic or corporate terms. Although Kakao has been hailed as an icon of Korea’s competitiveness, this sentiment is ironically what caused, at least partially, the recent outage, which resulted from the inexcusable oversight of its inadequate emergency preparedness and an overly lenient regulatory stance that the Korean governments, liberal and conservative alike, have taken over the past decade during Kakao’s non-stop expansion.

The discourse of economic growth as a blanket check

For a long time, and still now, the concept of economic growth has been a staple of the mainstream economics and associated disciplines (Spangenberg, 2010). The power of growth-focused economic discourse is even stronger in relatively less developed economies, as they struggle to catch up with the advanced economies. In Korea, the so-called compressed economic development model had been a dominant force until the assassination of the authoritarian dictator Park Chung-hee in 1979 (H. J. Park, 2003). Although Korea transitioned successfully to a liberal democracy in 1987 and it is now classified as a high-income, developed country, the legacy of the compressed economic growth paradigm is still highly visible in both Korean economy and Korean society.

The discourse of economic growth works in tandem with the discourses of innovation and competitiveness in the Korean platform economy. Although not necessarily in the same exact order, the logic between the three discursive devices would look like: Innovate to become competitive, compete to grow, and grow to benefit the whole country. As noted earlier, Kakao grew most explosively during the Moon administration, which pledged to promote small- and medium-sized businesses, while curbing big businesses (S. Kim, 2021). Yet seeing his pro-labor, wage-led economic initiatives faced vehement resistance from both the conservative opposition party and chaebols, and probably more importantly, noticing those progressive economic policies did not yield the expected outcomes in a short-term measurable manner, Moon and his economic staff had to devise a plan that could help dampen the resistance (Choi, 2018). In so doing, Moon’s initial redistribution-centered economic policy sneakily shifted to the tech-driven, growth-oriented one, a return to the neoliberal economic agenda that he had been attacking vigorously during his presidential campaigns (“‘Platform Economy’ Card,” 2018). To justify this controversial shift, Moon’s chief economic advisor, Jang Ha-sung stated that business-friendly policies and “eased regulations can increase the country’s economic growth” (as cited in Y.-C. Kim, 2018). In his revised economic vision for Korea, Moon clearly identified the platform economy as a key pillar for Korea’s renewed economic growth. While his broadly defined platform economy included everything that sounds innovative, such as big data, artificial intelligence, 5G telecommunications, bio health, and more, it failed to articulate what economic growth really meant for the public, how the gains from it would be distributed in a fair and just manner.

Moreover, the government’s strong drive for economic growth was resoundingly matched by Kakao’s promise to create more jobs across a range of its platforms and their service areas. When the then-Prime Minister Kim Boo-kyum visited the campus of Kakao to announce the partnership between his office and Kakao, Kim Beom-su, the founder of Kakao, pledged to create 20,000 new jobs in the next five years (Y. Lee, 2022). Yet it did not take much time before it proved an empty gesture, as Kakao is now cutting back its staff in the face of uncertain economic conditions. It just shows how precarious platform-based jobs are, unlike rosy government projections.

Evoking the dictator Park Chung-hee’s incredibly fast economic growth, the current President Yoon Suk Yeol did not hesitate to prioritize economic growth from his first day in office. Yoon (2022) stressed the notion of “rapid growth” multiple times in his inauguration speech. In it, he asserted that “rapid growth will open up new opportunities . . .. It is critical that we achieve rapid growth and this will only be possible through science, technology, and innovation.” The increasing monopolization of digital platforms is then excused as long as it is believed to create jobs and makes positive impact on the stock market charts. In this discursive environment, not only is economic growth used as a blank check, through which to advance any interests that platform monopolies seek to pursue, it is also used as a buffer against criticism. For instance, in a congressional hearing following the Kakao outage, Kim Beom-su appeared to dodge and deflect criticism, by saying that “there is no precedent worldwide for [compensation] . . .. Once I have achieved the level of growth I planned, I wanted to build a company that contributes to society by way of technology and innovation” (“Investigation on the Kakao Outage,” 2022, p. 10). The Kakao founder tried to evade the public outcry and possible punitive measures by framing economic growth as a precondition for social obligation and responsibility.

In sum, the discourse of economic growth has become a blank check, on one hand, to legitimize pro-market, neo-liberal economic agenda, and, on the other, to give an easy excuse to platform monopolies in the face of major scandals. As shown, the discursive intersection between innovation, competitiveness, and economic growth within the context of Korean platform economy prioritizes economic, private interests over public, democratic ones.

Implications of platform regulation for the vibrant public sphere

The Kakao blackout and the public’s increased awareness about the danger of platform monopolies draw significant implications for platform regulation. Among them, the most urgent one, apparently, will be a legal mandate that requires multiple, decentralized data networks for platform operators. In the face of increasing risks of technology failures that derive from both natural disasters and human-made crises, the need for maintaining multiple data centers with robust backup systems becomes more important than ever.

While it is important to study the changing nature and roles of digital platforms as a new public sphere, it would be equally critical to delve into their infrastructure and the institutional, regulatory arrangements that structure it, as Plantin and Punathambekar (2019) calls for a more intellectual focus on “the infrastructural turn in media and communication studies.” As the penetration of digital infrastructures that serve economic, cultural, and governmental purposes obfuscate the traditional boundaries of media studies as well as media regulation (Poell, 2020), it becomes critical to question how platforms and their profit-oriented, algorithmic mechanisms can undermine the foundations of the digital public sphere. “[M]edia technologies of arcanization, the practices of making things secret, and the politics of radical secrecy and non-appearance” (Beyes, 2022, p. 111) are clearly an anti-thesis to the notion of the vibrant, democratic public sphere. Indeed, when platforms that the public use not only for their daily routines, but for other civic, political duties are controlled by private corporations with extremely loose social obligations, they will only keep doing their business as usual to maximize their profits. This is why Habermas (2022) asserts that new digital technologies, despite their democratic potential, are “taking place in the shadow of a commercial exploitation of the currently almost unregulated internet communication” (p. 146). If we are to envision a truly vibrant and democratic public sphere where multiple publics participate freely in the search for meaningful agreements about collective norms and goals, fundamental reforms must be undertaken, on one hand, to strengthen non-proprietary communication infrastructures, and on the other, to mitigate negative externalities such as monopolization, political polarization, and data exploitation.

Therefore, it becomes clear that platform monopolies, with their current structures and practices, cannot serve well the real interest of the vibrant public sphere and democracy. This is why, even a platform economy evangelist like Sangeet Choudary, warns about the danger of platform monopolies, saying “today’s large platforms pose an increasing threat to their ecosystem” (Platform Revolution, n.d.). Yet some argue that completely dismantling platform monopolies may not be in the best interest of ordinary users (Hovenkamp, 2021), because large platforms generate their unmatched network effects and as a result, they can provide users with free, customized services. While this line of argument may be valid to a certain extent, real problems lie in the fact that platform monopolies can effectively shut out smaller, newer entrants to the platform economy, because of the winner-takes-all logic of platform capitalism. Once locked into a certain platform with their personal data, social networks, family memory, and more, it becomes virtually impossible for users to venture out to other platforms. As a matter of fact, virtually all Kakao users, despite their frustration and dissatisfaction with Kakao, had to come back to its platforms due to extremely limited data portability and other compatibility issues (S.-E. Park, 2023).

Undoubtedly, the health of democracy depends greatly on the public’s willingness and ability to freely discuss and debate important issues that affect their community, society, and country. Digital technologies, including platforms, were once thought of as a truly viable public sphere that can revitalize democracy. Yet as can be seen in the recent cases of Facebook Papers and Twitter Files scandals, expecting proprietary platforms to carry out serious democratic obligations on their own would be very naïve. Although individual users and activists can voice their opinions and organize certain large-scale movements on those platforms, all those efforts can be easily attenuated or even debilitated altogether by hidden algorithms that govern those platforms. This is why envisioning the digital public sphere by way of public-controlled platforms becomes utterly important. Such an effort, at the same time, will certainly include stronger demands for algorithm inspection by the public and regulatory bodies, data transparency, easier data portability, and other measures that empower the public when they use proprietary platforms.

Conclusion

Prompted by dismay at the recent Kakao outage, this article has sought to examine how platform monopolies could erode, rather than strengthen, the very foundations of public lives. It was found that Kakao’s rapid growth and the subsequent monopolization has taken place in a political–economic environment that valued the economic at the expense of the public. It was further found that this narrow, undemocratic conception of digital platforms was legitimized and reproduced by the discourses of innovation, national competitiveness, and economic growth.

As findings reveal, the enormous power that Kakao wields over public lives stems from both material, institutional and communicative, discursive sources. The political economy of Korean platform monopolies has been shaped by state-supported, neoliberal, and techno-utopian forces, while such forces have been simultaneously legitimized by the dominant economic discourses. This unwelcoming, destructive interplay takes place in an environment where proprietary platforms’ private interests are strategically aligned with noble national desires for driving technological innovation, boosting national competitiveness, and promoting economic growth.

For too long, issues of accountability, transparency, and public scrutiny over commercial platforms have remained in the back burner of regulatory priorities. The recent Kakao blackout ought to serve as a wake-up call to open up a long overdue public discussion on how digital platforms should be regulated. While this study may signal such an initial effort, it is limited because of its exploratory nature. Future studies may target specific sites, time periods, practices, or user experiences of Korean digital platforms, yet all within the intellectual tradition of critical and cultural studies, to unearth the peculiar negative consequences of platform monopolies.

As more and more digital technologies penetrate the public sphere with their ability to target and modify public perceptions and behaviors, it becomes ever more important to reassess the roles and influence of digital platforms. Although conventional regulatory means such as antitrust regulations and free speech protection may well continue to guide such efforts, a new array of context-specific progressive policy agenda should be considered, including what Pickard (2021) calls a new “social contract” model of big tech regulation. His idea of social contract as a regulatory metaphor comprises two groups of clauses: one that clarifies platforms’ moral, democratic obligations and one that elucidates punitive measures, including contract termination, that will be taken when platforms fail to meet the stated performative criteria (pp. 325–326). Such contract that involves citizens, civil society, and policymakers will be a meaningful first step toward reforming platforms to serve the best interests of the vibrant digital public sphere and substantive democracy.