Reviving an Epithet: A New Way Forward for the Essential Facilities Doctrine

Tracing its origins back nearly a century, the essential facilities doctrine requires the sharing of a natural monopoly asset that serves as a necessary input in another market. Failure to share such an asset can invite antitrust liability. The doctrine rests on two basic premises: first, a natural monopolist in one market should not be permitted to deny access to the critical facility to foreclose rivals in adjacent markets; second, the more radical remedy of dividing the facility among multiple owners, while mitigating the threat of monopoly leveraging, could sacrifice important efficiencies. This duty-to-deal, whereby the owner of an essential facility must share it with all comers, is a narrow exception to the longestablished antitrust rule that firms have no general obligation to share their assets with rivals.

Notwithstanding its vintage, the doctrine has received sharp criticism in recent decades. In Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, the Supreme Court stated in dictum that the forced sharing of assets may conflict with the broader goal of the antitrust laws. The late Phillip Areeda, coauthor of the leading antitrust treatise, described the doctrine as “an epithet in need of limiting principles.” Others have been equally critical of its economic purpose. Nevertheless, some scholars continue to defend the doctrine as being economically rational and practically useful in this century.