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 lease between Shannon Aerospace Ltd and AIB.

2. The notification concerns the lease of a site for an Automated Bank Teller Machine on the company's premises at Shannon Industrial Estate, Shannon, Co. Clare between Shannon Aerospace Ltd as landlord and AIB as tenant.

3. AIB is the largest commercial bank in Ireland with a wide branch network throughout the State. It also operates 263 ATM's including 28 at non branch locations which can also be used by account holders of other major banks. Shannon Aerospace Ltd, which is jointly owned by GPA, Lufthansa, and Swissair, is engaged in the repair and maintenance of aircraft.

4. The notified agreement was made on 11 May 1992 for a term of 10 years from that date. The restricted user clauses in the lease are as follows:

(a) Under clause 2(d) the tenant covenants with the landlord to:

"....use or occupy the demised premises or permit the same to be used or occupied for the purpose of the installation operation and maintenance thereon and therein of an Automatic Bank Teller machine for use in connection with the Tenant's business as Bankers and shall not permit the demised premises to be used for any other purpose or in any manner inconsistent with such user or occupation."

(b) Under clause 4 the landlord covenants with the tenant that:

"The Tenant shall throughout the term hereby granted have exclusive rights to carry on the business of Banking in the property of the Landlord situated at Shannon Airport, Co. Clare, Ireland."

There are also a number of other provisions relating to the occupation and maintenance of the premises.

5. The Authority considers that Shannon Aerospace Ltd and AIB are undertakings and that the notified lease is an agreement between undertakings. The agreement has effect within the State.

6. The agreement notified contains standard restrictions and obligations on both landlord and tenant which are necessary for the maintenance of a proper relationship between both parties in regard to the operation of the concession 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 ATM on the company's premises for the term of the agreement. 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.In this instance AIB points out that their ATM facility on the company premises can be used by customers of the other financial institutions who have reciprocal arrangements with AIB bank. The Authority therefore considers that the notified agreement between Shannon Aerospace Limited 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 Shannon Aerospace Limited and Allied Irish Banks PLC in relation to a lease of a site for an ATM at Shannon Industrial Estate, Shannon, Co. Clare notified under Section 7 on 30 September, 1992 (notification no. CA/435/92 ),does not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

10 March,1994.