Freshfields Bruckhaus Deringer competition partner Deirdre Trapp has scored a Competition Appeal Tribunal victory for supermarket giant Tesco after the Competition Commission tried to alter the process for okaying new or extended stores.
Tesco, which was represented by Brick Court Chambers’ Nicholas Green QC, had challenged an earlier Competition Commission decision that said a competition test should be used when considering planning applications for large grocery stores
Effectively the test would have forced local authorities to reject applications for the construction or extension of large supermarkets if there was already a high number of stores in the area and the retailer in question had a substantial part of the market.
Speaking after the appeal judgment was handed down, Trapp said: “It’s a completely unprecedented judgment – the courts have never previously found against the Competition Commission in the context of a market investigation.
“It’s a landmark decision and it will give rise to a number of interesting legal issues.”
She added: “This was a successful team effort by Tesco and its team of advisors, to confront an inquiry finding that seemed unjustified.”
According to Tesco’s appeal, the commission had not taken account of all the detrimental effects the competition test could have when it drew it up.
Tesco argued, among other things, that the test would prevent 24 per cent of existing larger grocery stores in the UK from extending.
In its judgment the tribunal, led by Mr Justice Barling, said that the commission did not “fully and properly assess and take account of the risk that the application of the test might have adverse effects for consumers as a result of their being denied the benefit of developments which would enhance their welfare”.
That said, the tribunal judges stressed that, while finding in favour of Tesco, their conclusions “do not preclude the possibility that the test would ultimately be lawfully recommended by the commission and implemented”.
The Competition Commission was represented by Monckton Chambers’ Peter Roth QC, who was instructed by the Treasury solicitor.