Essential Facilities Doctrine Research Articles

Global Antitrust Trends in the Context of Refusal to License Iprs

This research paper contributes to the analysis of the interaction between intellectual property law and competition law, particularly on the issue of refusal to license intellectual property rights, which is one of the most prominent friction points of the two policy areas. Two leading IP systems, with mature antitrust laws, the United States of America and the European Union, have adopted different approaches to balance IPR and competition laws. Both jurisdictions have adopted the Essential Facility Doctrine, but are defining the doctrine in different ways. In the European Union, refusal to license is treated more harshly than in the US. Apart from these two jurisdictions, the current trend in developing countries is to avoid competition law regulations. This paper analyzes the general directions and effects of competition law regulations on developing countries, and provides a review of the legal remedies generally adopted to address the unlawful refusal to license IPR.

Theories of self-preferencing and the wishful prerequisite of the essential facilities doctrine: A reply to Bo Vesterdorf

Theories of self-preferencing and the wishful prerequisite of the essential facilities doctrine: A reply to Bo Vesterdorf

Theories of Self-Preferencing Under Article 102 TFEU: A Reply to Bo Vesterdorf

In a 2015 paper, Bo Vesterdorf argues that there is no legal basis for the decisional implementation of theories of abusive self-preferencing under Article 102 TFEU. His paper comes in the context of the headline-grabbing Google search investigation in the EU. In Vesterdorf's view, the sole legal avenue that may be used to order a dominant firm to favour its own services is the essential facilities doctrine. Vesterdorf goes on to make a very restrictive description of the scope and conditions of application of the essential facilities doctrine in EU law. This paper is a reply to Bo Vesterdorf's paper. It shows that the Vesterdorf paper does not withstand a comprehensive positive law analyzis. The case-law provides several legal basis for the promotion of theories of abusive self-preferencing under Article 102 TFEU. Moreover, in positive EU law, the essential facilities doctrine is not the narrow theory of liability described in Vesterdorf's paper. Finally, the concept of competition on the merits is of limited help to redeem a dominant firm's abusive conduct.

Assessing data access issues in online platforms

Online platforms have the characteristics of a particular type of market known as ‘multi-sided’. These businesses create value by bringing advertisers and users together. Access to user data is critical to this process. On the basis of economic literature, the features of multi-sided platforms will be discussed. It will be argued that the characteristics of multi-sided platforms increase the likelihood that successful companies become dominant due to the existence of indirect network effects. In these circumstances, dominant platforms may foreclose competition by raising barriers to entry in the large collections of user data. This may give rise to access problems for competitors and new entrants that need access to data gathered by dominant platforms in order to provide competing or complementary services. A comparative legal analysis will be used to assess the standards that are applicable in the United States (US) and the European Union (EU) for finding liability for refusals to deal under antitrust or competition law. The private antitrust cases that have already occurred regarding access to user data in the US show that the scope of applicability of the US essential facilities doctrine is very limited after the judgment of the Supreme Court in Trinko. Although the European Commission and the European Court of Justice seem to be willing to accept liability for a refusal to deal more easily than their US counterparts, high legal hurdles still have to be met under the essential facilities doctrine in the EU. Nevertheless, there are scenarios in which liability for refusals to give access to data will likely be accepted in the EU.

Article 102 and the 'Competition Claim': the Implications for Technology Sector

This report considers the European Commission's enforcement of Article 102 TFEU in the technology-driven market with a view to establishing whether Art 102 protects inefficient, smaller competitors rather than the competitive process. The report a provides a critical analysis of the essential facilities doctrine in the EU and argues that the Commission has revitalised the age-old ‘competitor claim’ criticism and created transatlantic rift between European and US anti-trust enforcement. However, it concludes that this trend is reversing as demonstrated by the comparative outcomes of the Commission's earlier Microsoft litigation to it's approach in the more recent Google investigation.

The “Exceptional Circumstances” Test: Implications for Frand Commitments from the Essential Facilities Doctrine Under Article 102 TFEU

(2014). The “Exceptional Circumstances” Test: Implications for Frand Commitments from the Essential Facilities Doctrine Under Article 102 TFEU. European Competition Journal: Vol. 10, No. 1, pp. 37-67.

The Essential Facilities Doctrine: The Lost Message of Terminal Railroad

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.

Strategic Underinvestment as an Abuse of Dominance under EU Competition Rules

The latest frontier of the essential facility doctrine under EU competition law is the use of antitrust rules to impose on dominant firms a duty to invest in infrastructure development. While a genuine lack of capacity has traditionally been considered an objective justification for a refusal to grant access to an essential facility, the decisions issued by the Italian Competition Authority in Eni/TTPC and by the Commission in GDF Suez and Eni have questioned the dominant firms' freedom to decide whether, to what extent and under what conditions to invest in infrastructure development. In all the above-mentioned cases, the antitrust authorities were ultimately concerned with the dominant firms' alleged failure to make adequate investments in infrastructure development, as a consequence of the conflict of interest inherent in vertical integration. However, the objections raised by the Italian Competition Authority and by the Commission rest on profoundly different - and, to a certain extent, contradictory - grounds. Whereas the Eni-TTPC decision appears to have been heavily influenced by an extremely complex and peculiar set of facts, the GDF Suez and Eni decisions were based on the essential facility doctrine. The broad and flexible interpretation of this doctrine set forth by the Commission seems to have further lowered the threshold above which antitrust authorities may find abusive a refusal to grant access to an important facility. Furthermore, the Commission introduced a notion of strategic underinvestment based on the independent facility operator test, which seems extremely discretionary and difficult to apply.

Understanding Statutory Bundles: Does the Sherman Act Come with the 1996 Telecommunications Act?

Three recent appellate decisions - Goldwasser, Trinko and Covad - have addressed the interplay of the 1996 Telecommunications Act and the antitrust laws. This area raises questions of both substantive law and standing. This essay focuses on standing and in particular the question of how the antitrust doctrine in Illinois Brick should apply to situations in which there is an alleged breach of an access duty owed by an incumbent local exchange carrier. That access duty might arise under the 1996 Act itself or under applicable antitrust doctrines, such as the essential facilities doctrine or the duty to deal with competitors seen in Aspen Skiing. The essay sets forth a model of access duties leading to entry and Cournot duopoly and evaluates outcomes when that access duty is breached. The essay discusses various approaches to allocating suit rights depending on the purpose of enforcing the duty. I argue that the Illinois Brick doctrine which bars suits by consumers as indirect purchasers should have little application to the breach of access situation as the de facto compensation rationale of Illinois Brick won't operate when the entrant has been denied the mandated access.

The 'Unexceptional Circumstances' Test: Implications for FRAND Commitments from the Essential Facilities Doctrine Under Article 102 TFEU

Concerns over the global expansion of intellectual property (IP) rights and the notorious practice of tactical maneuvering on behalf of dominant undertakings in standard setting processes have placed talks about “fair, reasonable and nondiscriminatory” (FRAND) licensing terms at the heart of the current competition law regime. The acronym FRAND, also referred to as RAND in the United States (without the “fair” requirement), has been infamously difficult to define especially in relation to compulsory licensing and royalties determination. The concept gained excessive attention with the start of the Microsoft litigation in 2004. There, the EU competition authorities investigated, inter alia, whether the software giant had provided access to its interoperability information, i.e. its essential facility, on “fair, reasonable and nondiscriminatory” terms. Despite the wide attention paid to the issue in the legal and academic circles, clarifications from the courts and the Commission on the actual meaning of a FRAND commitment have been rather limited. Due to its apparent vagueness and lack of a well-established method for calculating licensing fees, the existing literature has been predominantly economics-oriented.In an attempt to solve this fundamental ambiguity problem, the thesis fills an existing gap in the literature on “fair, reasonable and non-discriminatory” terms by drawing on a fundamental feature that a FRAND violation and a refusal to license share. Due to the indispensability of the intellectual property held by the inventor and the indispensability of the essential facility in refusal to license IP right cases, the technological creations (or information as was the case in Microsoft) appear to be vital for the survival of both the standardization process in the first case and the competitors in the second case. Drawing on this link, the thesis investigates the competition authorities’ reading of the essential facilities doctrine in an effort to extrapolate a meaningful guidance as regards a future FRAND violation. The present thesis therefore centers on the unduly benign approach towards the rivals of dominant undertakings evident in the present reading of the “exceptional circumstances” test. Furthermore, it assesses the overly aggressive application of Article 102 TFEU and the gradual shift in priorities and in balancing of efficiencies in the decisions of the competition authorities.

Essential facilities doctrine in European Union Law

Formed at the end of the nineteenth century in the United States, the essential facilities doctrine was created to prevent the refusal of access to certain key equipment, which is used as an instrument to secure the dominant position of the undertaking in those markets where the emergence of competition is strictly related to obtaining access to key device. The author describes the initiation in the 1970’s of the acquisition of the American doctrine by European Union law by focusing on the role of the European Commission and the Court of Justice of the European Union in this process. Both American and European prsemises for an application of the essential facilities doctrine are presented, as well as its advantages and disadvantages.

ACCESS AND INFORMATION REMEDIES IN HIGH-TECH ANTITRUST

As antitrust becomes more complex, so do its remedies. While access and disclosure remedies have been a part of antitrust law since the very earliest days of the Sherman Act, they have become a vital part of litigated cases and settlements only recently in both the United States and the European Union. This has been particularly true for cases involving network industries, telecommunications, broadcasting, software platforms, and other high-technology industries at the forefront of antitrust enforcement. Interestingly, these cases and settlements constitute an informal revival of the essential facilities doctrine and an acknowledgement that the doctrine (and its equivalents) remain an important and needed part of the antitrust toolkit. This article will examine the growing use of complex behavioral remedies in both merger and monopolization cases, which suggest antitrust enforcement has moved far beyond any stated preference for structural remedies. Among the examples I use are the Microsoft and Intel litigation in the United States and the European Union, as well as more recent merger consent decrees involving Google-ITA, Comcast-Universal, and Livenation-Ticketmaster to illustrate these important changes in competition law enforcement and what they portend for the future.

Tough Enforcement of Unilateral Conduct at the National Level: Italian Antitrust Authority Sanctions Bayer and Pfizer for Abuse of Dominant Position (aka AstraZeneca Ruling and Essential Facility Doctrine in Italian Sauce)

In the Bayer and Pfizer decisions of the Italian Antitrust Authority (IAA), the application of the legal standard to find an abuse seemed to be tougher than the standards applicable at the EU level. The IAA's theory on misuse of regulatory procedures seems to imply that reliance on legitimate patent instruments or proprietary information can constitute an abuse in itself. The IAA's essential facility doctrine seems to ignore the ‘new product’ requirement under settled EU case law. While in the majority of its earlier decisions on abuse of dominance, the IAA had accepted commitments proposed by the concerned companies, in the Bayer and Pfizer decisions the IAA found an infringement and imposed sanctions; it remains to be seen whether this new course will continue under the new Chairman of the IAA.

Should Google Search Be Regulated as a Public Utility?

I examine the validity of the arguments for regulating Google search and find that they are insufficient and that regulation would likely be counterproductive. Google search does not fit the traditional frameworks for justifying regulatory control, namely, the public utility concept, common carrier concept, and essential facilities doctrine. For example, Google’s search is not monopolistic in nature, does not preclude rivals from competing against Google, does not rely upon grant of a franchise as does a utility, and does not take control of rivals’ content or service. Furthermore, the advocates for regulation fail to give adequate weight to the changes that constantly occur in the search business, the ways that rivals benefit from Google’s investments, the negative impacts of forcing Google to reveal its search algorithms, and regulation’s stifling effect on innovation.

Intellectual Property Rights, Interoperability and Compulsory Licensing: Merits and Limits of the European approach

The Essential Facilities Doctrine, albeit an American case-law creation, is also implemented in the European Union. While, since Trinko (2004), the US Supreme Court seems to challenge its implementation, European antitrust authorities tend to extend this doctrine to intangible assets. Focusing on European case-law, we observe several differences between American and European competition policies. This article highlights these dissimilarities - which are going much further than the sole implementation of the EFD - and underlines both the principles and the limits of the European approach. As a final purpose, this work tries to point up some of these differences' origins. In this way, we argue that, if the US and the EU antitrust authorities are consistent with their respective conceptions of competition, these policies are not neutral on the innovation incentives

공정거래법상 필수설비의 거래거절 -방송 콘텐츠의 적용을 중심으로-

방송시장에서 지상파 재전송 제도의 개선과 PAR 등의 도입이 거론되는 이유는 방송 콘텐츠가 주요 경쟁수단으로 인식되고 있기 때문이다. 특히 유료방송시장에서 SO와 PP의 전략적 제휴는 경쟁 사업자에 대한 콘텐츠의 배타적 거래로 이어져 상대 사업자의 정상적인 경쟁을 저해하고 시청자의 접근권을 제한하는 결과를 초래하고 있다. 이로 인해 방송시장에도 필수설비 이론이 도입되어야 한다는 주장이 제기되고 있으며, IPTV법의 콘텐츠동등접근조항과 방송법상 금지행위 도입도 이와 같은 맥락에서 이해될 수 있다. 그러나 방송 시장에 대한 필수설비 이론의 적용은 일반 설비와 콘텐츠가 기반하는 철학적 경제적 법체계적 차이로 인해 부작용을 초래할 것으로 예상된다. 따라서 필수설비의 개념과 필수설비의 거래거절에 대한 기본적인 개념과 이것이 경쟁 시장에서 구현되는 구체적인 심결례 및 판례를 검토하는 기초작업이 필요한 시점이다. 본 연구는 이러한 검토를 통해 방송 콘텐츠에 필수설비 이론의 적용이 타당한 것인지 사전적인 제언을 하는데 그 목적이 있다. As broadcasting contents are recognized as a key competition means, there are issues raised such as improvement of terrestrial retransmission system, introduction of PAR in broadcasting market and so forth. Especially, in pay broadcasting market, strategic partership between SP and PP leads to contents exclusivity for competitors, which causes to hinder normal competition and limit viewers' right of access. Consequently, not only is it claimed that essential facilities doctrine should be adopted in broadcasting market, but also clause of content equal access in IP TV law and adoption of prohibited acts regulation can be viewed in the same context. However, adoption of essential facilities doctrine in broadcasting market is likely to be counterproductive because of the differences of philosophies, economies and legal systems on which general facilities and contents are based. Therefore, it is time for a essential facilities concept, a fundamental concept of a refusal to dealing of essential facilities, and basic works to review specific cases and precedents implemented in competition laws market This study aims to review and propose beforehand if adoption of essential facilities doctrine is appropriate for broadcasting contents.

Just what is the scope of the essential facilities doctrine in the energy sector?: Third party access-friendly interpretation in the EU v. contractual freedom in the US

The application of EU competition law in the energy sector has intensified over the last few years. Article 102 TFEU and the essential facilities doctrine has been employed to change the way in which the European natural gas markets operate. Using a merits based approach to the essential facilities doctrine and transportation capacity contracts, the Commission is attempting to create a market structure capable of supporting competition. While the effect of this body of administrative cases is increasing opportunities for competition and as such can be seen as positive, the measures forced on the back of the essential facilities doctrine raise serious questions on its applicability and scope of actions it allows. A comparison to the case law in the United States shows a stark difference in the approach on the other side of the Atlantic. The Courts in the United States have been less willing to substitute the market-based mechanism with their own views about the most efficient market structure.

Access and Information Remedies in High Tech Antitrust

As antitrust cases becomes more complex, so does its remedies. Patterns are beginning to emerge in the dizzying array of remedies in recent monopolization and merger cases. Like the cases themselves, the remedies increasingly focus on access to network industries and platform technologies. In an economy increasingly dominated by information and information technology, access is often dependent on seamless interoperability. It is thus not surprising that antitrust remedies increasingly also have focused the disclosure of competitively necessary information as well as the protection of competitively sensitive information obtained from actual or potential competitors. Finally, the more complex the remedy, the greater the need for sophisticated oversight and dispute resolution mechanisms that rely on third-party experts and typically exceed the resources and strengths of the enforcement agencies. While access and information remedies have been a part of antitrust law since the very earliest days of the Sherman Act, they have become a vital part of litigated cases and settlements in recent times in both the United States and the European Union. This has been particularly true for cases involving network industries, telecommunications, broadcasting, software platforms, and other high technology industries at the forefront of antitrust enforcement. When taken together, these recent cases and settlements constitute an informal revival of the essential facilities doctrine and an acknowledgment that the essential facilities doctrine, and similar access remedies, remain an important and needed part of the antitrust toolkit. This essay will examine the growing use of complex behavioral remedies in both merger and monopolization cases that suggest antitrust enforcement has moved far beyond any stated preference for structural remedies. Particularly in settlements, commitments, and consent decrees, the Antitrust Division, Federal Trade Commission, and the European Commission have permitted mergers and unilateral conduct by dominant firms conditioned upon complex behavioral commitments include: 1) Continued obligations to supply or license competitors and customers with vital inputs on fair and non-discriminatory terms; 2) Continued obligations to allow competitors access to networks on fair and non-discriminatory terms; 3) The disclosure of intellectual property, know how, and technical information necessary to make these access obligations meaningful; 4) Creation of firewalls and other devices to prevent the dominant or merging firms from misusing competitively sensitive information obtained through their ongoing relationships with their competitors and customers; and 5) The use of special masters, technical committees, monitors, regulatory bodies, and the creation of third-party alternative dispute resolution procedures to handle the inevitable disputes that will arise without requiring the agencies or courts to act as long-term regulators of the industries and firms in question. I use examples such as the Microsoft and Intel litigation in the U.S. and the EU, as well as more recent U.S. merger consent decrees involving Google-ITA, Comcast-Universal, and Live Nation-Ticketmaster to illustrate these important changes in competition law enforcement and what they portend for the future.

Interface between Intellectual Property and Competition Law: Essential Facilities Doctrine

Intellectual property rights and competition law are two separate legal regimes having distinct objectives and purposes. Intellectual property rights are the exclusive rights conferred upon the creator or the inventor of the property to use and enjoy his creation or invention exclusively. Competition law on the other hand preserves competition in the market. Its main purpose is to prevent monopolization of the production process and allowing entry to the competitors in the market. Although there is a common area where both Intellectual property and competition law intersect with each other yet their objectives are always conflicting with each other. Since both IPRs and competition policy are necessary to promote innovation and ensure a competitive exploitation thereof. Thus, the main function of law is to ensure their co-existence by striking a balance and removing any tension that subsists between Intellectual property rights and competition policy. However, It is important to remember that the purpose of competition law is to protect competition not competitors and in the majority cases the blind application of the doctrine will only serve to undermine the incentives for dynamic efficiency that underpin the competitive process.

Access to European Energy Networks: The Relation between Third Party Access and Refusal to Deal Concepts

In this paper, we will analyse further the issue of concurrence between competition and sector rules regarding European Energy Networks Regulation and the relation between parallel concepts within the two different legal frameworks, by focusing on the issue of Access to these Networks. We will specifically examine Third Party Access - as a concept of Energy Sector Regulation - in relation to essential facilities doctrine and refusal of access - as a concept of Competition Law - and we will identify the common points and objectives of these concepts and the extent to which they provide a context to each other’s implementation. Moreover, we will examine which concept provides the best framework for an efficient energy market with respect to both long-term and short-term competition objectives and to which extent each concept should offer its own elements to the final framework for the regulation of access to energy networks.