Due to claims that the Government and prosecutors have been using Kakao Talk logs to monitor people, Kakao has taken a beating, resulting in over 400,000 users migrating to other applications that have off-shore servers and better security, such as Telegram (cite) (There are reports that even prostitutes that conduct business arrangements through Kakao have switched to Telegram due to security concerns.) I also use Telegram and it works well.
The government has reportedly done so for state security concerns as well as enforcing the infamous defamation laws. According to one source:
Accusations by the New Politics Alliance for Democracy on alleged cyber monitoring by the government gained more credibility yesterday when it was reported that prosecutors are planning to monitor some key words on major portal sites that they believe would disturb “social order” and “defame” people, after which they would order the managers of those sites to delete the posts. (cite)
Kakao has responded by apologizing for allowing security concerns to mount:
Lee Sirgoo, CEO at DaumKakao which owns Kakao Talk, apologized for its initial handling of privacy issues at a news conference called at short notice by the company. The government’s recent announcement of stern punishment for what it called online rumors prompted many South Koreans to switch from Kakao Talk to foreign messaging services. . . Kakao Talk will introduce new privacy features to protect the information of its users, he said. Next year, it will begin deleting messages from its servers as soon as they have been read by the intended recipients. The company said it could face legal sanction by refusing to cooperate with warrants. . . .It has also adopted a new privacy mode, which uses end-to-end encryption, allowing chat records to be stored only on each user’s smart device and making it impossible for investigators to monitor the contents. “We will continue to search for more necessary measures and make improvements down the road,” Lee said. “Kakao Talk has been growing on the back of users’ trust. We know it will take excruciating efforts to regain users’ trust,” Lee said.
Daum Kakao commands about 35 million local users for its flagship Kakao Talk in the country with a population of 50 million, compared to around 10 million users held by LINE, operated by Naver Corp. Kakao Talk also has about 152 million users worldwide through 15 languages, including Korean, English, Japanese, Spanish, German, Arabic and Russian. (cite)
As in America, if the government sabotages public confidence in software developers offerings, the result will likely be bad for business and a major setback for Korean software developers, who already have onerous burdens put upon them by government regulations.