Martin Retail Group Ltd v Crawley Borough Council: the Competition Act 1998 ‘lands’ a council with a problem

The Central London County Court has, in the first reported case on the subject, ruled that a restriction on use in a lease breaches the Chapter I prohibition of the Competition Act 1998.

Section 2 of the act prohibits certain anti-competitive agreements (the Chapter I prohibition). By virtue of the Competition Act 1998 (Land Agreements Exclusion and Revocation) Order 2004 land agreements were originally excluded from the application of the Chapter I prohibition; however, the exclusion order was revoked on 6 April 2011. Since the revocation of the exclusion order, all new and existing agreements that create, alter, transfer or terminate an interest in land may, depending on the circumstances, fall within the scope of the Chapter I prohibition. Infringing the Chapter I prohibition has serious consequences and agreements that breach it will be rendered void and unenforceable unless certain exemption criteria, set out in section 9 of the act, can be met.

The Office of Fair Trading, in order to assist companies in assessing their agreements for compatibility with competition law, published detailed guidance on the subject, which has since been adopted by the Competition and Markets Authority (CMA). This guidance contains specific commentary on many commonly occurring restrictions in land agreements and also details on the regulator’s enforcement priorities with regard to such agreements…

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