Competition Act Extended to Land

from 6 April 2011, the Competition Act 1998 has been extended to cover agreements made with regard to land. Such agreements were previously excluded from the scope of the Act.

The Act seeks to prohibit agreements etc. that prevent, restrict or distort competition.

The change is important for owners and occupiers of land because it has hitherto been common for agreements (especially tenancy agreements) to contain exclusivity clauses – for example, where a tenant retailer agrees with its landlord that no competitor of the tenant will be allowed retail space in the same development. In such cases, the agreement may now be unlawful.

Where such agreements are in place, it is sensible to have them reviewed to ensure they do not conflict with the principles contained in Chapter 1 of the Act. See http://www.legislation.gov.uk/ukpga/1998/41/part/I/chapter/I.

The Office of Fair Trading has issued guidance on the changes, which can be found at http://www.oft.gov.uk/OFTwork/policy/land-agreements/.