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.
Lee said the app suffered a loss of users and a decrease in mobile traffic but declined to say how many users quit its service.
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.
"When there is no social consensus on the law and privacy, our policy will put privacy first in any case," Lee said.
It was not immediately clear how the government would respond to Kakao Talk's stance. South Korea's justice minister told lawmakers on Monday evening that he would look into Kakao Talk's statement. Some legal experts said unless Kakao Talk physically blocks authorities from carrying out warrants, it would not face sanctions.
The popular mobile messenger app initially said it would cooperate with authorities and declined to disclose the number of court-approved search requests it received, only to disclose the figures last week after criticism mounted.
During the first half of 2014, Kakao Talk received 2,131 requests for users' information from South Korean authorities with search warrants and cooperated with more than three quarters of those requests.
Kakao Talk also received 61 court-approved requests during the same period seeking to wiretap what users said because they were under suspicion of certain charges such as rebellion or violation of the National Security Law.
The company denied the warrants were used by authorities to monitor what users said in real time, saying it wasn't technologically equipped for that. But it cooperated with nearly all the 61 requests by collecting messages that had been stored on its servers for between three and seven days.
Since October 7, the company has stopped cooperating with authorities with court warrants authorizing wiretapping or collection of stored messages. Lee said authorities will be hindered in their ability to access messages as the company has reduced the storage time to three days.
The DaumKakao press conference came a day before its shares start trading on Seoul's stock market. Shares of its predecessor company, internet portal Daum Communications, plunged 8% on Monday.
Telegram Messenger, a Germany-based smartphone messaging app, rose to top of app download rankings in South Korea with users leaving reviews that they are seeking a 'cyber refuge' because of the Kakao Talk scare.
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