Commerial Law

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Antonio Gallo Palenzuela

Explain the concept of essential facilities and asses whether or not it pushes competition law too far.

Professor Philip Areeda, professor at Harvard University who was considered as the foremost expert on antitrust law, wrote “It is less a doctrine than an epithet indicating some exceptions to the right to keep one’s creation to oneself, but not telling us what those exceptions are”[1]. The essential facilities theory finds its beginning in the other side of the Atlantic, in the United States of America, and it is legitimated under the section 2 of the Sherman Act(§2 – Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony…[can be individuals]). This section is one of the most common weapon against the monopoly in U.S.A as long as it is chosen as the starting point for the theory we are going to study. This theory finds its place in Europe in the article 82 (ex article 86) of the EC Treaty: Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member States. Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

From this article we can talk about a common policy in trust for the European market which supposes a better position for the small undertakings that decide to take the risk that it involves to get into a new market, with the respective expenses they have to support to achieve a quota in it. From the understanding of this article, we should be able to infer the evident influence of the Sherman Act and the development of the antitrust law. There are some aspects of this article, one of the leading in the search for a clear and fair market that must be taken into account before going into a more meticulous study of the essential facilities and how they have an influence in competition law. One of these factors is that in the article, as in the Sherman Act, the legislator is looking for an easier way of inclusion. A first approach to the definition of essential facilities could be the following; when we refer to essential facilities we are talking about a kind of facilities that should be specially protected against the menace of the monopoly or any other alteration of the market. But at this point, we have to solve one question, why must essential facilities be more overprotected than others and in which areas? The reasons for this special protection is based on the grounds that the non existence of an equal access to these resources, it is provoking inequalities between enterprises and brands in the same sectors. One of the things we try to avoid with these measures is that the transparency of the market forces and all the system it coordinates would be in risk. The two main characteristics of essential facilities which help us to draw the main lines of their contents are[2]:

a) competitors must have access because it is essential for the provision of goods or services in that related market; and
b) it is not economically efficient or may not be feasible for new entrants to replicate.

There are some sectors where we can easily distinguish...
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