The Essential Facilities Doctrine: The Lost Message of Terminal Railroad

38 Pages Posted: 10 Mar 2014  

Stephen M. Maurer

University of California, Berkeley

Suzanne Scotchmer

University of California - Department of Economics ; School of Law, University of California, Berkeley; National Bureau of Economic Research (NBER)

Date Written: March 10, 2014

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 Trinko (2007), the U.S. Supreme Court came close to abolishing it. At the same time, it was reinvigorated by the European Commission, which asserted it successfully in E.C. v. Microsoft, 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 namely, harvesting economic synergies through sharing. We argue that, absent such a doctrine, these synergies could be lost as firms either avoid sharing to avoid antitrust 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 any harm to competition.

Keywords: Competitions policy, antitrust, Sherman Act, essential facility

JEL Classification: K21, L40, L41

Suggested Citation

Maurer, Stephen M. and Scotchmer, Suzanne, The Essential Facilities Doctrine: The Lost Message of Terminal Railroad (March 10, 2014). UC Berkeley Public Law Research Paper No. 2407071. Available at SSRN: https://ssrn.com/abstract=2407071 or http://dx.doi.org/10.2139/ssrn.2407071

Stephen M. Maurer (Contact Author)

University of California, Berkeley ( email )

Berkeley, CA 94720
United States

Suzanne Scotchmer

University of California - Department of Economics ( email )

Berkeley, CA 94720-3880
United States
510-643-8562 (Phone)

School of Law, University of California, Berkeley ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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