Anticompetitive Consequences of Exclusivity Clauses Contained in Shopping Centres’ Lease Agreements

Abstract

This article discusses the impact of commercial lease agreements concluded in shopping centres that contain exclusivity clauses on competition. It assesses whether these clauses restrict equitable retailer participation in shopping centres, thereby denying consumers competitive prices and product choices. It also demonstrates that the South African Competition Commission has classified lease agreements' exclusivity clauses as problematic and persuaded the major grocery retailers to phase them out. While this is a positive step, this article argues that there should be some regulatory framework that can ensure that none of these retailers continue to restrict competition in shopping centres by enforcing exclusivity clauses. The Commission should play a prominent role in ensuring that the terms of the consent orders signed by some of these retailers are respected to ensure that competition is promoted in shopping centres in South Africa.