Under the essential facilities doctrine, amonopolist found to own "a facility essential to other competitors" is required to provide reasonable use of that facility, unless some aspect of it precludes shared access.[1] The basic elements of alegal claim under this doctrine underUnited States antitrust law, which aplaintiff is required to show to establish liability, are:
control of the essential facility by a monopolist
a competitor’s inability to practically or reasonably duplicate the essential facility
the denial of the use of the facility to a competitor; and
the feasibility of providing the facility to competitors
These elements are difficult for potential plaintiffs to establish for several reasons. It is quite difficult for a plaintiff to demonstrate that a particular facility is "essential" to entry into and/or competition within therelevant market. The plaintiff must demonstrate that the "facility" must be something so indispensable to entry or competition that it would be impossible for smaller firms to compete with the market leader. Likewise, the plaintiff must show that compelling thedominant firm to permit others to use the facility would not interfere with the ability of the dominant firm to serve its own customers.
The first notable case to address the anti-competitive implications of an essential facility was the Supreme Court's judgment inUnited States v. Terminal Railroad Association, 224 U.S. 383 (1912).[2] A group of railroads controlling all railway bridges and switching yards into and out ofSt. Louis prevented competing railway companies from offering transportation to and through that destination. The court held it to be an illegal restraint of trade.[3]
Similar decisions include,
Associated Press v. United States, 326 U.S. 1 (1945), in which the Supreme Court found that theAssociated Press bylaws which limited membership and therefore access to copyrighted news services violated the Sherman Act.
InLorain Journal Co. v. United States, 342 U.S. 143, 146-49 (1951),The Lorain Journal was the only local business doing news and advertisements in town. The case was that refusing to place an ad for the customers of a small radio station was a Sherman Act violation. In the end, the court accepted an offer to simply accept the advertisements.
Otter Tail Power Co. v. United States, 410 U.S. 366, 377-79 (1973), in which the Supreme Court found thatOtter Tail, an electrical utility which sold electricity at both directly to consumers and to municipalities who resold to consumers, violated the Sherman Act by refusing to supply electricity at wholesale, instead serving customers directly itself.
Hecht v. Pro Football where potential American Football League franchise did not show they needed Washington'sRFK Stadium, the essential facilities doctrine was not met.
There is controversy about what exactly constitutes an "essential facility". While the doctrine has most frequently been applied tonatural monopolies such asutilities and owners of transportation facilities, it has also been applied[specify] in situations involvingintellectual property. For example, it is possible for a court to apply the doctrine in a case where one competitor refuses to sell materials protected bycopyright orpatent to potential competitors.
Sullivan, E. Thomas, andHovenkamp, Herbert.Antitrust Law, Policy, and Procedure: Cases, Materials, and Problems, Fifth Edition.LexisNexis Publishers, 2004.ISBN0-8205-6104-5 pp. 701–706.
