Irish Competition Authority Decisions

1. Notification was made by Allied Irish Banks plc (AIB) on 30 September 1992 with a request for a certificate under Section 4(4) of the Competition Act 1991 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 licence agreement between Dublin City University and AIB.

2. The notification concerns the grant of a licence by Dublin City University as grantor to AIB as licensee to provide bank facilities on the premises of the Dublin City University at Glasnevin, Dublin 9.

3. AIB is the largest commercial bank in Ireland with a wide branch network throughout the State. Dublin City University, as successor to NIHE, Dublin is a self governing body and a designated institution under the Higher Education Authority. It is primarily engaged in the provision of third level education and research.

4. The notified agreement was made on 3 December, 1985 between The National Institute for Higher Education, Dublin and AIB for a term of 20 years from 7 October, 1982. The restricted user clauses in the licence are as follows:

(a) Under clause 3(21) the licensee covenants "To use the Licensed Premises as a bank only and in particular but without prejudice to the generality of the foregoing not to use any part of the Licensed Premises for business purposes (other than as a bank) or as a residence...."

(b) Under clause 3(26) the licensee covenants "Not to assign or let or share or part with possession of the Licensed Premises or any part thereof."

(c) Under clause 5(6) it is agreed that "During the term hereof and provided the Licensee is using the Licensed Premises for carrying on its business as a Banker, the Grantor will not permit in any manner or mode whatsoever the user of any other part of the building or the grounds thereof for the provision of any banking or ancillary service which may be in competition with the Licensee's business as aforesaid."

In addition there are a number of other provisions relating to the occupation and maintenance of the premises.

5. Section 4(1) of the Competition Act, 1991 refers to agreements between undertakings and Section 3(1) of the Act defines undertaking as a "person being an individual, a body corporate or an unincorporated body of persons engaged for gain in the production, supply or distribution of goods or the provision of a service." According to the judgment of the Supreme Court in the VHI case, as delivered by Finlay C.J, the words "for gain" connote merely an activity carried on or a service supplied, as in this case, which is done in return for a charge or payment". Dublin City University is engaged in the provision of the service of third level education and research for which it receives substantial revenue by way of fees etc and it is therefore an undertaking engaged for gain in the provision of a service. AIB is an undertaking engaged for gain in the provision of banking and other financial services. The notified agreement is therefore an agreement between undertakings. The agreement has effect within the State.

6. The agreement notified contains standard restrictions and obligations on both parties which are necessary for the maintenance of a proper relationship in regard to the operation of the licence and the occupation of the premises. These do not raise issues under the Competition Act. The agreement also provides for exclusivity in relation to the operation by AIB of the banking concession. In a number of earlier decisions the Authority has already indicated its view that exclusive user clauses in the letting of premises in a particular shopping centre or building complex do not offend against Section 4(1) of the Competition Act. For similar reasons this view also applies in relation to the grant of an exclusive concession to use premises in a building complex for the purposes of a business. In this instance there are several other banks within a radius of 2 miles of the campus. The Authority therefore considers that the notified agreement between NIHE, Dublin, now Dublin City University, and AIB 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 NIHE, Dublin, (now Dublin City University) and Allied Irish Banks plc in relation to a banking facility in Dublin City University, Glasnevin, Dublin 9 notified under Section 7 on 30 September 1992 (notification no. CA/436/92E), does not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

10 March 1994