Kakao Corp. 47%

OVERALL – 47%

Kakao placed fifth among Internet companies, behind Twitter and ahead of Facebook. The company changed its name in September 2015 to “Kakao” from “Daum Kakao,” the name it had used since the merger of two companies Daum and Kakao in 2014. While South Korea’s Internet is rated only “partly free” by Freedom House’s 2015 “Freedom on the Net” index, the country has a strong civil society, lively press, and competitive political system, all of which have contributed to the emergence of public demands for greater transparency by companies and government, particularly in relation to surveillance. Kakao’s commitments and disclosures related to freedom of expression and privacy are significantly stronger than any other non-Western company examined in the Index. Its privacy practices also reflect South Korea’s strong legal framework for data protection. Notably, Kakao earned leading scores on eight indicators in the Index, with five of those surpassing any other company evaluated.

COMMITMENT – 39%

Kakao placed fifth among Internet companies for its disclosure of commitments and evidence of accompanying measures to implement those commitments. It surpassed Twitter by four percentage points in this category but trailed the other four U.S.-based Internet companies (all of which are members of the Global Network Initiative) by a substantial margin. Kakao earned at least some points on every indicator in this category.

Balance of commitments: Kakao’s commitments and related implementation tended to be stronger for privacy than for freedom of expression. For example, we found publicly disclosed evidence of executive and management oversight (C2) on user privacy issues, but no evidence of similar oversight for freedom of expression. We found public disclosure on training and internal whistleblower mechanisms (C3) for privacy but not freedom of expression. Kakao operates within a legal context that involves restrictions on freedom of expression that have been criticized domestically and internationally as being counter to international human rights norms. Nonetheless, the company faces no legal barriers to commit to respect users’ freedom of expression at the same level of its commitments to privacy.

Engagement: Kakao is an active member of industry organizations that engage with stakeholders, and the company earned credit for this stakeholder engagement (C5).

Remedy: On grievance and remedy processes (C6) Kakao received a higher score than any other Internet company evaluated in the Index. This is largely due to requirements under South Korea’s Act on Promotion of Information and Communications Network Utilization and Information Protection. On freedom of expression, Kakao goes beyond the law by providing users with an appeals mechanism when content is removed in compliance with requests made under anti-defamation law.

FREEDOM OF EXPRESSION – 59%

Kakao placed second behind Google among Internet companies – and in the Index overall – on Freedom of Expression. It earned leading scores on four of the ten indicators in this category, with two of those surpassing all other companies evaluated. Most notably, Kakao earned the highest score of the entire Index on indicator F2, which examines whether the company provides notice and record of changes to its terms of service - an indicator on which most companies fared poorly. In fact, Kakao received full scores on this indicator for Daum Search and Mail, while KakaoTalk’s weaker disclosure brought down the company’s overall score to 83 percent. The company discloses in great detail its reasons for content restriction (F3) and account or service restriction (F4), and it provides examples to help users understand these company policies.

Transparency about requests for content restriction: Kakao publishes a transparency report that includes more information about requests for content restriction than many of its Internet peers. Furthermore, its transparency report contains more data about private requests to restrict content (F8) than any other company in the Index, although it still received fewer than half of the total possible points for that indicator. However, there are limits to how much detail the company can disclose. Company representatives told our research team that the company is legally prohibited from publishing copies of original documents that request content restriction.

PRIVACY – 42%

Kakao placed fifth among Internet companies on Privacy, ahead of Facebook and behind Twitter. It earned leading scores on four of the 14 indicators in this category, with three of those higher than any other company evaluated.

Handling of user information: Notably, the company’s disclosure about collection of user information (P3) greatly surpassed any other company in the Index. Disclosure about the sharing of user information (P4) tied with Yahoo, the other top performer on this indicator. On some other indicators, Kakao lagged behind its peers. The company does not offer users any meaningful options to control what user information the company collects or shares (P5), and similarly, it offers users no means to access the information the company holds about them (P6). Disclosure about retention of user information (P7) was minimal for Daum Search and Mail, though much better for KakaoTalk. The company discloses nothing about collection of user information from third parties (P8) although in feedback to our research team, company representatives pointed out that companies are required by law to disclose such a practice if they engage in it.

Transparency about requests for user data: Kakao discloses a considerable amount of information about its process for responding to third-party requests for user information (P9). It discloses as much information about the volume and nature of third-party requests for user data (P11) as AT&T and Microsoft, though less than Twitter, Google, and Yahoo. However, the company is constrained by law in terms of the types of notification it can provide to users about government requests for user information (P10).

Security: KakaoTalk’s “secret chat” function offers full encryption of the contents of user conversations, earning Kakao first place in the entire Index on encryption of users’ private content (P13). Its disclosure about security practices (P12) was highest among all Internet companies examined. While Kakao’s performance on these two security-related indicators was superior, the company itself does not provide any user education about security threats (P14). Instead, company representatives indicated that a government website makes such information available to Korean users. To receive credit on this indicator, companies must provide such disclosure on their own sites.