The Office of Fair Trading (OFT) has published a guideline for businesses about the types of land agreements that may infringe competition law.
Until now, agreements between businesses concerning land have benefited from special treatment and have been excluded from the UK competition law prohibition on anti-competitive agreements.
However, from 6 April this exclusion will be removed and restrictions that prevent, restrict or distort competition will be void and unenforceable. Companies involved in anti-competitive agreements can also face fines of up to 10% of their annual worldwide turnover.
The OFT has considered responses from a number of interested parties on draft text published in October 2010 and, in response, the final guideline seeks to provide greater clarity about the types of agreement that are likely to infringe competition law and those that are not.
There is now no presumption that a land agreement will infringe competition law and the OFT expects that only a small minority will do so.
Restrictions on the use of land may potentially infringe competition law where this protects a business from competition, or prevents its competitors from entering a market.
The OFT says it is “generally”” unlikely to take further action in cases where none of the parties to an agreement has more than a 30 per cent share of the market in which the land is being used.