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Case law: Landlord preventing a tenant from selling goods in competition with another breached competition law

Landlords leasing neighbouring property to different tenants should take care imposing restrictions for the purpose of protecting the businesses of the others, otherwise they risk breaching competition law.

Legal Alert

This update was published in Legal Alert - June 2014

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

A landlord who attempted to restrict a tenant from selling groceries and alcohol when its lease came up for renewal was in breach of competition law, a county court has decided in the first ruling of its kind. A neighbouring property also leased by the landlord was the only shop on the estate selling alcohol and groceries. The nearest alternative was a 15-minute walk away. This meant the neighbour had an effective monopoly on staple goods on the housing estate - a market in which customers would not travel far to buy such staples. There was no retail property available from other landlords.

The tenant therefore claimed the landlord was breaching competition law in trying to impose the restriction.

The court ruled that the proposed restriction was in breach of competition law, and not within any of the exemptions that can apply. This is the first time competition law has been held to apply in such circumstances.

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