The Essential Facilities Doctrine: Keeping the Word 'Epithet' from Becoming One

Abstract

The District of Columbia Circuit in 1977 coined the term "essential facilities" to refer to a doctrine it traced 65 years of prior Supreme Court jurisprudence, and every federal circuit has recognized the essential facilities doctrine with similar elements. The United States Supreme Court, however, has never actually used the words "essential facilities" in a holding. In 1989, concerned by what he perceived to be the potential overuse of the essential facilities doctrine, Professor Phillip Areeda published his well-known article "Essential Facilities: An Epithet in Need of Limiting Principles". As the name suggests, this article made a provocative point - that the essential facilities doctrine was in need of "limiting principles," without which it would be overused and lead to mistaken and counterproductive results.

The article explores how the growing academic criticism of the essential facilities doctrine has gone too far. By and large, the case law has dealt adequately with the "essential facilities doctrine," and it throws the baby out with the bath water to forget the important core case that justified the doctrine in the first place. Worse still, thinking of Professor Areeda and his followers as solely critics of the essential facilities doctrine runs the especial risk of failing to enforce the antitrust laws where even the doctrine's critics agree antitrust enforcement makes sense - efforts by regulated monopolies (such as the telephone network) to exact monopoly rent by stifling competition in unregulated markets that depend on the monopoly's facility.

JEL Classification: K21, L41, L43, L96