Constitutional Court Rules 'Bundled Sales of Ads between Terrestrial and Local/Small Broadcasters' Constitutional
The Constitutional Court of Korea has upheld the system of bundling advertisements from terrestrial broadcasters with those from local and small broadcasters as constitutional.
On October 26, 2023, the Constitutional Court of Korea ruled that the practice of bundling advertisements from terrestrial broadcasters and local or small broadcasters is constitutional. This decision came after a film production company representative challenged the 'bundled sales system,' claiming it infringed upon the freedom of contract and business operations. The court dismissed the constitutional complaint with a majority opinion of 8 to 1, emphasizing that advertisers have alternative options such as using ads from comprehensive programming channels or online platforms, thus mitigating claims of excessive restriction on contractual freedom.
The bundling of ads is mandated under the law to support local and small broadcasters who face challenges in ad sales, aiming to ensure the public accessibility and diversity of broadcasting. According to the law, advertising agencies are required to combine terrestrial ads with those from local and small broadcasters when selling. The complainant, identified as Mr. G, claimed that he was compelled to give up advertising because he was unable to contract only for terrestrial broadcast ads without including local ads as per the bundling requirement, which he argued violated his rights to property, equality, and freedom of contract.
In its ruling, the court acknowledged the need to support local and small broadcasters but indicated that alternative support methods should be carefully developed. It stated that implementing a new fund to assist these broadcasters would require thorough legislative consideration of various elements, and simply establishing a fund was not a guaranteed solution to replace the current bundled ad sales system. The ruling highlights the balancing act between supporting smaller broadcasters and ensuring freedom for advertisers, reflecting broader implications for the future of media regulations in Korea.