Consultation on the future of the Land Agreements Exclusion and Revocation Order 2004
Open date: 29 Jul 2009
Closing date: 04 Nov 2009
Response date: 13 Jan 2010
Background to consultation
Chapter I of the Competition Act 1998 prohibits agreements between undertakings that restrict competition in markets. Land Agreements are currently excluded from that general prohibition under the Land Agreements Exclusion and Revocation Order 2004. The Order reflects the position that land agreements are generally considered not to have a substantive negative impact on the state of competition in markets.
However, in its final report into the UK groceries sector, published in 2008, the Competition Commission (CC) found that, in highly concentrated local markets, certain land agreements which restrict grocery retailing are capable of having an adverse effect on competition by serving as a barrier to new parties entering the market and to existing parties expanding their business.
In view of this, the CC concluded that land agreements relating to the groceries sector should no longer benefit from the exclusion from the Chapter I prohibition provided for by the Land Agreements Exclusion Order. The CC also recommended that Government consider repealing the Exclusion Order altogether as they deemed it an anomaly in the modern competition regime and believed there may be other sectors, not just groceries, in respect of which land agreements might be similarly capable of having adverse effects on competition.
Purpose of consultation
We are seeking views on the merits of each of the three options on the Exclusion Order, as listed below, to ensure we have as full an understanding of the effects of each option and the likely impacts on business and consumers to assist in the decision making process.
Areas of the consultation
We are seeking views from interested parties on whether the Land Agreements Exclusion Order should be (i) retained; (ii) amended so that it does not apply to land agreements in the grocery sector or (iii) repealed altogether as the CC has invited us to consider.
The Government’s preliminary view, explained further in the consultation document, is that following modernisation of competition law in 2004, the original reasons for having an exclusion for land agreements are no longer valid and there is no longer a case for treating such agreements differently to other types of agreement. Such a change would not mean land agreements would cease to be valid - only that they would need to be assessed for compatibility with the Chapter I prohibition in the same way as any other agreement.
Responses to consultation
This consultation is now closed
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