No Shortcut to Antitrust Analysis: The Twisted Journey of the “Essential Facilities Doctrine:

Monday, January 1st, 1996 at 12:00 am by Allen Kezsbom, Allan V. Goldman
Allen Kezsbom, Allan V. Goldman, No Shortcut to Antitrust Analysis: The Twisted Journey of the “Essential Facilities Doctrine:, 1996 Colum. Bus. L. Rev. 1

The essential facilities doctrine (the “doctrine”), as the concept has usually been understood, was designed to create liability under Section 2 of the Sherman Act. As originally conceived, when a monopolist or near-monopolist controlling what is deemed an “essential facility” denies an actual or potential competitor access to that facility, where the facility cannot reasonably be duplicated and where there is no valid technical or business justification for denying access, then the doctrine is applied. In practice, however, the doctrine has become an empty label and, in turn, has fostered a misleading approach to antitrust analysis. The doctrine (sometimes also called the “bottleneck” monopoly theory) is increasingly perceived as establishing liability by proof of something different from what is otherwise required under traditional “refusal to deal” or “monopolization” theories. One commentator has asserted that the doctrine represents a “streamlined technique” for proving actual monopolization in violation of Section 2 of the Sherman Act. Not surprisingly, therefore, the doctrine is in vogue with plaintiffs who view it as a short-cut method for proving seeming “abuses” of “monopoly” power. The concept of an essential facility has been used by would-be competitors who do not have the skill or drive to “blaze their own path,” but instead simply wish to appropriate, under the guise of requiring “fair” access to “essential” facilities, the capital investment and business efforts of their successful predecessors in the relevant market. Ironically, the courts have generally recognized that the antitrust laws were never intended to serve the purposes of jealous competitors who merely seek to require a successful competitor — even a monopolist — to redistribute the wealth it has lawfully earned. The legitimate goals of antitrust are often said to be promotion of economic efficiency through protection of the competitive process itself, rather than of any individual competitor. As the Supreme Court has put it, the antitrust laws were enacted “for the protection of competition, not competitors.” Nevertheless, because of misconceptions as to its proper meaning and scope, the essential facilities doctrine has been misapplied in the courts and has often been invoked in circumstances when it has resulted in findings of antitrust violations where there is no valid antitrust rationale for any finding of illegality. It is the object of this article to trace the development of the essential facilities doctrine and examine the recent case law in an effort to put in perspective what cannot be validly covered under the rubric of an essential facilities analysis.

Author Information

Allen Kezsbom is a senior litigation partner in the New York office of Fried, Frank, Harris, Shriver & Jacobson. Alan V. Goldman is a senior associate in the same firm.