South Korea's Constitutional Court has ruled that the "bundled broadcast advertising system," which requires advertisers seeking airtime on major terrestrial broadcasters to also purchase ads from regional and small broadcasters, does not violate the constitution.
The court on Thursday dismissed a constitutional challenge filed by Lee, a film production company executive, against Article 20, Paragraphs 1 and 2 of the Broadcast Advertising Sales Agency Act (Media Rep Act).
The provisions stipulate that "advertising sales agents handling terrestrial broadcast ads must sell regional and small broadcaster advertising bundled with other terrestrial broadcast advertising."
In an 8-to-1 decision, the court ruled the bundled advertising system constitutional, finding it does not excessively restrict advertisers' freedom of contract.
"Advertisers who do not wish to purchase regional or small broadcaster advertising can use ads from comprehensive programming channels or other broadcast channel operators," the court said. "They can also choose various other forms of advertising, such as online advertising."
The court added that "the legislative purpose of financially supporting regional and small broadcasters with weak commercial viability to realize the public interest and diversity of broadcasting is legitimate."
However, the court acknowledged that the system's effectiveness has declined compared to the past as terrestrial broadcast advertising revenue has continuously decreased. "To effectively support regional and small terrestrial broadcasters, it is necessary to heed calls for legislative improvements to the provisions in question, in line with the development of various media and changed advertising market conditions," the court said.
Justice Kim Hyung-du issued a dissenting opinion, arguing the bundled sales system infringes on freedom of contract and freedom of commercial advertising expression. "Advertising media cannot be considered complete substitutes for each other, so for many advertisers, there is no practical meaning in advertising at all unless it is on major terrestrial broadcasts," Justice Kim said. "For these advertisers, bundled sales are effectively tantamount to forced additional purchases."