The 60-Second Read:
The essential facilities doctrine in the EU, like in the United States, is a remedy that tackles the abuse of market power by a firm that holds a dominant position and refuses to deal with its rivals foreclosing the markets. Thus, in the EU, as in any market economy, dominant firms do not have an obligation to cooperate with rivals. However, dominant firms do not hold the privilege of choosing not to deal with some specific competitors, as required by the essential facilities doctrine. To determine when dominant firms have to deal with competitors, EU courts have progressively crafted a test that helps determine when a unilateral refusal to deal is illegal.
As explained in our previous “Antitrust in 60 Seconds” piece, the essential facilities doctrine originated in the United States, but has gained clearer traction before the courts in the EU. In fact, whereas the doctrine’s U.S. viability remains debatable, it forms part of the EU competition framework in both theory and practice.
Similar to U.S. competition debates, discussions on the necessity of enforcing the essential facilities doctrine in the EU have focused on the doctrine’s impact on innovation. On the one hand, the European Commission has clearly stated that unilateral refusals to deal with competitors can be subject to antitrust liability in specific instances. On the other hand, there is broad consensus that the imposition of an obligation to deal with competitors should be used sparingly, as it can deter incentives to innovate and impact consumer welfare.