Ban on the Shuttle Bus OperationCase

(13-1 KCCR 1441, 2001Hun-Ma132, June 28, 2001)

In this case, the Constitutional Court upheld a provision prohi-biting department stores and large discount stores from operatingshuttle buses running from and to the stores.

A. Background of the Case

In late 1990s, the number of large retailers increased rapidly, anddepartment stores began to run shuttle buses to attract more cus-tomers. Shuttle bus operation by these businesses gave rise to fric-tion between them and smaller retailers and companies in the pas-senger transport service. Passenger transport service business aresubject to strict regulations concerning license requirements, fares,and route of its operation because of the strong public nature of theservice, but there was almost no restriction on the shuttle bus opera- tion by large retailers and discount stores because the buses charged

no fare. As the number of shuttle buses increased continuously, the passenger transport service companies complained of financial diffi-culties from the decrease in passengers. So the Administration urgedlarge retailers and discount stores to reduce the number of shuttlebus runs autonomously, but to no avail. On the contrary, the num-ber of shuttle bus operations increased. Thus, on December 29, 2000,the National Assembly revised the Passenger Transport Service Actto prohibit shuttle bus operation by department stores and large dis-count stores. Complainants who manage department stores or largediscount stores filed a constitutional complaint arguing that the stat-utory provision violated the freedom to conduct one's occupation(freedom of business).

B. Summary of the Decision

Four Justices decided to uphold the instant provision while four Justices decided it was unconstitutional. Because six votes are re-quired to declare a provision unconstitutional or to uphold a consti- tutional complaint, the Court denied the complaint.

(1) Opinion of Constitutionality

The freedom of occupation can be restricted when it is neces-sary for national security, for maintenance of law and order, or forpublic welfare. The Court has ruled that the legislature could imposebroader restrictions on the freedom to conduct one's occupation than the freedom to choose one's occupation.

The main line of business of department stores and large discountstores is "sales of merchandise," and not "passenger transport ser-vice." On the other hand, imprudent shuttle bus operation by depart-ment stores has caused damage to the passenger transport servicebusiness, which is public in nature, thus disrupting the maintenanceof a sound passenger transport service. Endless rivalry between com-peting department stores and discount stores as well as a differencein the transportation environment of larger metropolitan areas andsmaller cities have led to the failure of autonomous efforts to reduce shuttle operation by reducing the number of shuttle runs and routes. Therefore, the legislative purpose of the Act, namely, to establish anorder in passenger transport service and to protect the passengertransport service business, is legitimate. Such legislation is also ap-propriate as the means. The instant provision prohibits shuttle busoperations to "draw passengers" by "setting and operating specificroutes", and allows exceptions in areas where there is no publictransportation. The provision also allows the Minister of Constructionand Transportation, Mayor or Governor to order "extension or changeof existing routes" or "operation of out-of-the-way routes or

routesyielding no returns" when it is deemed necessary to facilitate smoothpassenger transportation and to improve passenger transport service.Thus, inconvenience to consumers is minimized. The private interestof the complainants in the case is decrease in sales upon prohibitionof shuttle bus operation by the Act. The public interest served bythe legislation, on the other hand, is the establishment of order inpassenger transport service and the achievement of the overall devel-opment of passenger transport service; and establishment of socialmarket economic order by pursuing balanced growth and stability ofnational economy and by democratization of the economy through har-mony among the economic agents as stipulated by Article 119 of the Constitution. Therefore, the instant provision of the Act passes thebalance of interest test. While the instant provision may restrict thecomplainants' freedom of business, it is within the limit prescribedby the Constitution.

(2) Opinion of Unconstitutionality

Operating a Shuttle bus is not a socially detrimental activity, andit is one aspect of an exercise of a constitutionally protected basicright. Therefore, it should be permitted in principle, and should onlybe regulated through specific legislation selectively restricting the pat-tern and scope of shuttle bus operation in cases where it is neces-sary to protect the interests of passenger transport service businesses.Such regulatory method satisfies the requirements for legislative re-striction on basic rights. However, in the instant case, the statutoryprovision prohibits all shuttle bus operation basically and compre-hensively, and allows only extremely limited exceptions. Such aninverted method of regulation inevitably results in prohibiting shuttlebus operation where there is no need for regulations, namely, wherethere is no harm done to passenger transport service businesses, andthis is excessive restriction. The instant provision is against theprinciple of proportionality, and hence, unconstitutional.