The Office of Fair Trading has published final guidance on its website on the application of the Chapter I Prohibition on anti-competitive agreements to land agreements.
The Competition Act 1998 (Land Agreements Exclusion Revocation) Order 2010 takes effect from April 6, 2011. By revoking the land agreement exclusion, such agreements will now come within the Chapter I Prohibition for the first time. If an agreement falls foul of the Chapter I Prohibition, it becomes unenforceable. Further, it may expose the person who imposed the prohibition to the possibility of injunctions, damages and, if sufficiently serious, to an OFT investigation, and a fine of up to 10% of turnover. Organisations will now have to self-assess land agreements for compatibility with competition law. The primary question will be whether the agreement has an appreciable effect on the prevention, restriction or distortion of trade in the relevant market. The OFT Guidance provides assistance in answering the two key questions – what is the extent of the “relevant market” in which the agreement operates, and is the restriction imposed likely to have an “appreciable effect” on trade in that market. The final guidelines seek to provide greater clarity about the types of agreement that are likely to infringe competition law and those that are not.