0370 270 6000

UK competition law to apply to land agreements

2 August 2010

After some delay, the Exclusion Order that excludes land agreements from the scope of UK competition law on restrictive agreements has been repealed. From 6 April 2011, agreements that relate to land will be subject to UK competition law in the same way as any other agreement.

Why does this matter and what can companies do?

The change in the law may affect the enforceability of restrictions in land agreements such as transfers of freehold, leases, assignments and licences. It may also prompt tenants and purchasers to resist typical restrictions such as restrictive covenants. In serious cases, companies could be investigated by the UK competition law authority (Office of Fair Trading) which has the power to impose fines of up to 10% of worldwide group turnover.

All companies should begin to prepare for the change in the law, particularly companies that are party to a number of land agreements (such as retailers, supermarkets and property companies). Immediate actions should include reviewing existing agreements and standard form documentation for compliance with the law.

What is the current position?

Since the Competition Act 1998 came into force over 10 years ago, land agreements have been excluded from the law in relation to restrictive agreements. In general, this has meant that typical restrictions on the use of land in agreements such as leases and transfers of freehold have not required analysis under competition law.

By way of example, a positive restriction that only allows a shop to be used as a card shop or a negative restriction that prevents a shop from being used as a sports shop have come within the scope of the Exclusion Order. Generally, it has also covered reciprocal restrictions such as a shopping centre tenant agreeing only to sell shoes on the basis that no other tenant will be permitted to sell shoes.

What happens on 6 April 2011?

From 6 April 2011, all restrictions in land agreements will require consideration under the Competition Act. It is important to note that the revocation has retrospective effect (i.e. it will affect agreements that are entered into both before and after 6 April 2011).

This does not mean that all restrictions in land agreements will be automatically illegal / unenforceable. In fact, in very many cases they are likely to be perfectly legitimate. However, it does mean that going forward companies need to make sure that they consider whether land agreement restrictions could affect competition.

The Office of Fair Trading will be publishing specific guidance on the change in the law and this should provide a steer on how to assess restrictions. This will not be available until autumn of this year.


Focus on...

Legal updates

Beauty Industry - Plastic Packaging Tax

The Government’s complicated new plastic packaging tax, which applies from 1 April 2022, provides another reason to start looking at alternative packaging materials. Current demand for those materials is however causing price rises and potentially deterring the switch.


Press releases

Browne Jacobson strengthens London commercial retail practice with double hire

Browne Jacobson has broadened its commercial retail offering with the appointments of commercial property partner Susan Voice and commercial solicitor Fiona McGurrin into its London office.



The London Fashion Week problem - Brexit and the protection of designs in the UK

London’s prized position as one of the ‘big four’ fashion capitals could be threatened by changes to IP protection following Brexit.


Future of retail - hear from James Reid, EMEA IT Director at Deckers Brands

James Reid of Deckers Brands joins a panel of experts to give a retail perspective on the usage of data, looking particularly at how retailers should keep their data current and relevant in order to enhance the experiences of tomorrow.


The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up