The Essential Facilities Doctrine: The Lost Message of Terminal Railroad

Article in a refereed journal

Stephen M. Maurer and Suzanne Scotchmer, "The Essential Facilities Doctrine: The Lost Message of Terminal Railroad", California Law Review, vol. 5, 2014, p. 278-316.[Full text]

Abstract

The growing importance of shared networks, shared platforms, and shared standards leads to a renewed discussion of the essential facilities doctrine of antitrust. This is an area where European law and American law have diverged. In Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko (2004),1 the U.S. Supreme Court came close to abolishing the doctrine. At the same time, it was reinvigorated by the European Commission, which asserted it successfully in Microsoft Corp. v. Commission (2007),2 and then, facing criticism, clarified the doctrine in a Guidance document. We harmonize the main cases around the doctrine’s original but often forgotten purpose: harvesting economic synergies through sharing. We argue that absent such a doctrine these synergies could be lost as firms either avoid sharing to avoid § 1 liability, or create sharing arrangements that undermine competition. We show how and why the original purpose of the doctrine has become entangled with other antitrust issues, in particular, leveraging. We systematize the sharing rules that have been imposed or allowed, with an emphasis on how to harvest synergies while mitigating harm to competition.

IAST Disciplines

Economics
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