Businesses should review land agreements to avoid infringing competition law.
Many UK businesses operate from, or handle property governed by, some form of land agreement. These land agreements can include agreements for the sale or lease of land and agreements dealing with the use of or access to land. Notably, as with other transaction agreements, land agreements must be compliant with competition law. Prior to 2011, restrictions contained in land agreements were exempt from the application of UK competition law due to the operation of the Land Agreements Exclusion Order; however, the Order was revoked in 2011 following the Competition Commission’s recommendations at the conclusion of the market investigation into the grocery retail sector. Consequently, UK competition law now applies to land agreements.
The UK Competition and Markets Authority (CMA) has not previously taken enforcement action or issued fines in relation to land agreements. However, the decision to impose a £1.6 million fine on Heathrow airport in 2018 indicates the CMA’s increased scrutiny of land agreement restrictions. The Heathrow case represents the first time that the CMA has used its competition enforcement powers to sanction a land agreement restriction. Moreover, on the same day that the CMA announced the Heathrow fine, it also published guidance entitled “Land agreements and competition: do’s and don’ts”. In addition, the CMA has recently sent letters to other airports and hotel operators warning against similar agreements. Continue Reading