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Distribution is a chain of businesses or intermediaries from a supplier or manufacturer through which a good or service passes until it reaches the final buyer or the end consumer. The Supreme Court’s decision not to invalidate Article 12-2 of the Distribution Industry Development Act (hereafter referred to as the “Act”) was issued on November 19, 2015, which aroused controversy ever since. The Article 12-2 of the Act, which obliges large discount stores and supermarkets (hereinafter referred to as “Large Discount Stores”) to restrict their business hours and holidays, was enacted on January 17, 2012. The Supreme Court ruled the validity of the law on the basis of general correlation and normal predictability, assuming that business restrictions are economic regulations based on Article 119, paragraph 2 of the Constitution. However, according to statistics from the Ministry of Commerce and Industry, sales of small enterprises and traditional markets have decreased steadily since the business regulation under Article 12-2 of 2012. Large Discount Stores regulated by the Act are also stagnant and declining, with growth rates in convenience stores, online shopping and franchise industries exceeding 10% every year. These statistics suggest that “market distortions” were caused by unprecedented regulations. Under the Act, business regulations are external social purposes, but they are actually economic regulations that affect the competition and structure of the distribution market. Accordingly, the impact on the market should be thoroughly reviewed to reduce distortions in the market. Large Discount Stores, like traditional markets, are just one distribution channel. The regulation law on distribution should be reviewed from a comprehensive and historical perspective for the development of the distribution industry.
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