Irish Competition Authority Decisions

1. Notification was made by Douglas Eyecare Ltd on 30 September 1992 with a request for a licence under Section 4(2) of the Competition Act, 1991, in respect of a lease between Riga Ltd and Douglas Eyecare Ltd.

2. The notification concerns the lease of a shop unit, Unit 21, at Douglas Shopping Centre, Douglas, Co. Cork between Riga Ltd as landlord and Douglas Eyecare Ltd as tenant.

3. Riga Ltd is engaged in the business of letting shop units at Douglas Shopping Centre. Douglas Eyecare Ltd trades as a retail optician, including dispensing and the making of spectacles, lenses and ancillary items at Unit 21 Douglas Shopping Centre.

4. The notified shopping centre lease which is in draft form is for a term of 25 years from 1 February 1992. The restricted user clauses in the lease are as follows:

(a) Under clause 4.22 the tenant covenants

"Not without the prior consent in writing of the Landlord or its Agents thereunder lawfully authorised to use or permit or suffer or allow the Demised Premises or any part or parts thereof to be used for any purpose other than as set forth in Part II of the First Schedule hereto and for no other purpose or purposes whatsoever......

Part II of the First Schedule under the heading "Permitted User" reads "Retail Opticians, including dispensing and making of spectacles, lenses and ancillary items.

(b) Under clause 4.23.2 the tenant covenants

"Not at any time to use the Demised Premises or any part thereof or allow the same to be used as a butcher shop or a greengrocers shop or as Building Society or Bank or for the sale of food..."

(c) Under clause 4.21 the tenant covenants with the landlord

"Not to assign, transfer or underlet or part with or share 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 as concessionaire and in no circumstance or event to an assignee who would carry on any business of a non-retail nature including Banks and Building societies BUT SO THAT NOTWITHSTANDING the foregoing the Landlord shall not unreasonably withhold its consent ...........

The applicant has also indicated that the Landlord has agreed that, when letting any of the other units in the property they will ensure that no other tenant shall use their Unit for a similar use.

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

5. The Authority considers that Riga Ltd and Douglas Eyecare Ltd are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

6. The Authority considers that the notified agreement, and its restricted and exclusive user clauses and the other standard restrictive clauses and obligations, does 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 1993 in respect of shopping centre leases (Iris Oifigiuil 10 September 1993, pp. 665-667). The Authority therefore considers that the notified agreement between Riga Ltd and Douglas Eyecare Ltd does not offend against Section 4 (1) of the Competition Act 1991.

7. 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 agreement between Riga Ltd and Douglas Eyecare Ltd in relation to the lease of the premises at Unit 21 Douglas Shopping Centre, Douglas, Co. Cork notified under Section 7 on 30 September 1992 (notification no. CA/240/92E), does not offend against Section 4 (1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

5 October 1993