Irish Competition Authority Decisions

1. Notification was made by Brian McCormack and John McCormack on 30 September, l992 with a request for a certificate under Section 4(4) of the Competition Act, l99l or, in the event of a refusal by the Competition Authority to issue a certificate, a licence under Section 4(2) in respect of a lease between The Square Management Ltd, Brian and John McCormack and 2 tenants at The Square Towncentre.

2. The notification concerns the lease of units 264 and 318A in The Square Towncentre, Tallaght, Dublin 24 between The Square Management Ltd as Freeholder, Brian and John McCormack, as landlord and 2 tenants.

3. The Square Management Ltd is the freeholder of The Square, Towncentre, Tallaght, Dublin 24. Brian and John McCormack are the landlords of units 264 and 318A in The Square. The tenants are engaged in retail trades at the shopping centre.

4. The standard shopping centre lease notified contains the following restricted user clauses viz.

(a) Under clause 3.2(3) the tenant covenants with the landlord "Not without the prior consent in writing of the Landlord and the Freeholder or their respective Agents thereunto lawfully authorised, to use or permit or suffer to allow the Demised Premises or any part thereof, to be used for any purpose other than PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED that upon any application by the Tenant, or any Undertenant of the Tenant, for liberty to alter or change the aforesaid permitted use of the Demised Premises the Landlord and the Freeholder shall not unreasonably withhold their consent..."

(b) Under clause 3.2(5) the tenant covenants with the landlord "Not to assign transfer, underlet, mortgage, charge or part with the possession or occupation of the Demised Premises or any part thereof or suffer any person to occupy the Demised Premises or any part thereof as a licensee or concessionaire except with the previous consent in writing of the Landlord and the Freeholder BUT SO THAT NOTWITHSTANDING the foregoing the Landlord and the Freeholder shall not unreasonably withhold its consent..."

In addition, there are a number of other standard restrictive covenants and obligations in the lease.

5. The landlords have furnished details of the permitted user under clause 3.2(3) attaching to each lease whereby the tenant is restricted to particular specified retail activities.

6. The Authority considers that Brian and John McCormack, The Square Management Ltd and the tenants are undertakings and that the notified leases are agreements between undertakings. The agreements have effect within the State.

7. The Authority considers that the notified agreements, and their restricted and exclusive user clauses and the other standard restrictive clauses and obligations, do not have the object or effect of preventing, restricting or distorting competition in trade in any goods or services in the State or in any part of the State, for the reasons given in the Notice of the Authority of 2 September, l993 in respect of shopping centre leases (Iris Oifigiuil of l0 September, l993, pp. 665-667). In fact, in this case, the arrangements provide for the location of competing outlets in the centre so no question of a restriction on competition arises. The Authority therefore considers that the notified agreements between The Square Management Ltd, Brian and John McCormack and their tenants do not offend against section 4(1) of the Competition Act, l99l.

8. The Competition Authority has issued the following certificate:

The Competition Authority certifies that in its opinion, on the basis of the facts in its possession, the agreements between The Square Management Ltd, Brian and John McCormack and their tenants in relation to the lease of premises at The Square Towncentre, Tallaght, Dublin 24, notified under Section 7 on 30 September, l992 (notification no. CA/842/92), do not offend against Section 4(1) of the Competition Act, l99l.

For the Competition Authority

Des Wall

Member

3 December 1993