Areeda, Epithets, and Essential Facilities

Abstract:     
The late Phillip Areeda's 1990 article Essential Facilities: An Epithet in Need of Limiting Principles has had a profound impact on the development on the essential facilities doctrine in antitrust law. It has become the intellectual basis for the critique and roll back of a doctrine that has been around for approximately the same amount of time as the rule of reason.

Apart from Professor Areeda's distinguished stature in the antitrust field, there was little reason to think this short essay would represent the start of a sea change in antitrust. The article was a short symposium piece based on a panel discussion held at a Fall 1989 program of the ABA Antitrust Section. Moreover, Professor Areeda's comments somewhat bucked the trend of the contemporary case law, commentary, and the remarks of the other panelists.

Although Professor Areeda was not altogether negative about the essential facilities doctrine, his article has proved to be one of the influential pieces in the canon of antitrust literature and represented the beginning of a counter-revolution in antitrust thought that has left the essential facilities doctrine, charitably speaking, hanging by a thread. In this article, I want to critically reexamine Areeda's analysis of the essential facilities doctrine and suggest that while many of his concerns were valid in the time of its publication, most of his concerns are no longer applicable in today's antitrust climate. Other of Professor Areeda's concerns were overblown to begin with, and more significantly, most have been taken out of context by critics of the essential facilities doctrine.

Part II briefly summarizes the essential facilities doctrine in US antitrust law. Part III then summarizes Professor Areeda's critique of the doctrine. Part IV examines how the Areeda critique has been used in the subsequent case law and scholarly debate beyond the more limited critique he may have envisioned.

Parts V and VI suggest there is a better way based on infrastructure theory which responds to most, if not all, of Professor Areeda's legitimate critiques and creates a sound theoretical basis for an economically based essential facilities doctrine. Infrastructure theory better ties the essential facilities doctrine to related doctrines in other areas of the law and suggests that essential facilities doctrine is one of better, not worse, ideas that antitrust has offered in its 100 plus years.

Keywords: Phillip Areeda, essential faciltiies doctrine, infrastructure, monopolization, conspiracy, antitrust

JEL Classifications: K21, K41, K42, L40, L41, L42

Accepted Paper Series