The OFT has produced draft guidance for businesses about the types of land agreements that might fall foul of competition law.
Currently land agreements between businesses benefit from special treatment under UK competition law but from 6 April 2011 land agreements that prevent, restrict or distort competition will be void and unenforceable.
Companies involved in such agreements will face fines of up to 10% of their annual worldwide turnover.
The draft guidance says that there is no presumption that a restriction in a land agreement constitutes an infringement of competition law, and the OFT expects that only a minority of restrictions will be anti-competitive.
It also claims that the types of restriction most likely to impact competition are those which keep other companies out of a market and the law will only apply to land agreements between businesses, and not transactions with individuals.
Cavendish Elithorn, OFT Senior Director for Policy, said: “The application of competition law will remove barriers to new businesses and open up competition in local areas for the benefit of consumers.
“In the vast majority of cases we would not expect land agreements to raise competition problems.
“However terms which restrict the process of competition, for example clauses to stop competitors from using land, can be problematic.
“This guidance is designed to reassure companies when there is unlikely to be a problem and help them assess when they need to take professional advice,” he said.
The OFT is inviting business to give feedback on the draft guidance by 14 January 2010, and aims to publish final guidance later in 2011.
The draft guidance can be found at the OFT website.
christian.metcalfe@estatesgazette.com
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