This article explains how the ‘essential facilities’ concept in competition law can hardly be applied to online platforms. Online platforms can be very useful, but they are not ‘essential’ to other businesses.
As mentioned in James’ recent post on Europe’s policy debate around the concept of ‘platform neutrality’, online companies are increasingly becoming a discussion point for European regulators. Given the political nature of this process, it is more accurate to say that it’s primarily politicians who call for more regulation of online platforms. The best example is a common French-German letter signed by government representatives of both countries voicing concern about competition in the digital economy. The addressee of this letter is the new European political leadership gathered in the European Commission.
The interesting bit in this debate is how openly both governments mingle established concepts found in competition law with an ex ante regulatory agenda. Accordingly, the French-German letter talks about digital platforms becoming “essential intermediaries” or “gateways” for the provision of services and digital content. The two governments call on the Commission to organise a public consultation on the appropriate regulatory framework for “essential platforms”. The letter’s accompanying ‘non-paper’ goes into greater depth by pointing out that defining “essential” in congruence with the classic definition of an “essential facility” must be part of the debate.
The last point really is the crux of the matter. If one wants to define “essential” in congruence with the competition law concept of “essential facility”, one has to look at the Commission’s enforcement history and at the European Courts’ jurisprudence. Which online company could in theory meet this legal standard? Could the highly competitive and diversified online environment ever produce a digital essential facility?