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1. Notification was made by The Governor and Company of the Bank of Ireland (Bank of Ireland) 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 University College Galway and the Bank of Ireland.

2. The notification concerns a licence agreement under which University College Galway renews a sole concession to the Bank of Ireland to carry on branch business within the College.

3. The Bank of Ireland is the second largest commercial bank in Ireland with a network of 290 branches within the State. University College Galway (UCG) is a constituent college of the National University of Ireland, which was established under the National University Act and incorporated by charter in 1908. UCG enjoys a large degree of autonomy with its own Governing body and is primarily engaged in the provision of third level education and in research. In addition to Government grants of £15.6m, UCG had an income in 1991/2 of £8.4m from academic fees, £4.9m in research grants and £0.8m from other sources.

4. The notified licence agreement was made in 1978 for a term of 20 years from 1 October, 1978. Under the agreement UCG agrees to grant a renewal of a sole concession to Bank of Ireland to carry on the ordinary business of a branch of the bank within the College and further agrees not to grant similar facilities to any other Bank over the 20 year period. Bank of Ireland is required to provide normal banking arrangements as well as student facilities and facilities to staff. The College is to provide the accomodation but the agreement specifically provides that it is a licence to use the offices provided and not a tenancy agreement. There is also provision for the payment of an annual licence fee by the Bank of Ireland as well as a number of 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 an 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. UCG 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. Bank of Ireland 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 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 Bank of Ireland 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 while Bank of Ireland is the only bank situated within the university campus, Allied Irish Banks has a branch adjacent to the campus. There are also a further 6 branches of competitor banks within a radius of 1.5 miles of the university while three building societies have three branches within the same radius. The Authority therefore considers that the notified agreement between University College Dublin and the Bank of Ireland 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 University College Galway and the Governor and Company of the Bank of Ireland, in relation to a banking concession at University College, Galway, notified under Section 7 on 30 September 1992 (notification no. CA/331/92E), does not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority

Des Wall

Member

10 March 1994