1. Essential Facilities Flashcards
(22 cards)
- What is EF?
Something owned or controlled by a dominant undertaking which other undertakings need access to (for customers). Sometimes called a “bottleneck monopoly”
- Refusal to grant access?
Refusal to grant access is a breach of Art 102 in some circumstances
often applies in industries such as transport or telecommunications.
- Origination of EF?
United States v Terminal Railroad Association [1912]
owners of vital transport, denied non-owner access. EF was not officially applied, but the unfairness of a unified/closed system with access for only one party was noted.
- American Case: MCI v AT&T
[1983]
Refused to connect MCI with local distributing facilities, limiting the range of services MCI could offer.
Clarified in para. 31 “monopolists refusal to deal under these circumstances is governed by the so-called essential facilities doctrine”
- MCI v AT&T (Part 2.)
refusal may be unlawful as it “can extend monopoly power”
There is also an “obligation to make the facility available on non-discriminatory terms”
- MCI v AT&T (Fourfold Test)
Control of EF by monopolist
Competitors inability to practically or reasonably duplicate EF
Denial of use to competitor
Feasibility of providing the facility to competitor
- EU Doctrine of EF
Doctrine of EF considered wider category of cases “unilateral refusal to supply or deal”
EF doctrine can be applicable under 101 or 102 but 102 is more likely.
- EU Case
British Midland/Aer Lingus [1992]
Denial of access to infrastructure critical to operate
Interlining: commercial agreement between airlines to handle passengers travelling on itineraries requiring multiple airlines.
- EU Case Facts
Commission found those holding dominant positions should not “withhold facilities which the industry traditionally provides to all airlines” Aer Lingus was dominant for London-Dublin
ordered to resume interlining with BM.
- Facts (Part 2.)
Can be withdrawn with objective reason for refusal (e.g concerns about creditworthiness) but none were provided.
Aer Lingus could not outline “efficiencies created” or “legitimate business justification” for refusal.
- Other Example
Port of Roscoff [1995]
Irish Continental Group were denied access to port.
The commission required “necessary steps to allow ICG access to port”
- Why Roscoff?
Art 102 : ‘ Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it”
Ports can be considered in a substantial part of it.
B&I/Sealink, Holyhead [1992]
- B&I Facts (Part 1.)
[1992] A facility may be considered “substantial” if access is “indispensable for the exploitation of a transport route which is substantial”
Sealink were the Port Authority at Holyhead and changed the timetable to the detriment of B&I which interrupted their loading and unloading procedures.
- B&I Facts (Part 2.)
It was said by EC that a “company which both owns and uses essential facility.. should not grant its competitors access on terms less favourable” than its own
- Sea Containers/Stena Sealinks Facts
[1994] it was ordered that sea containers be granted access to Holyhead.
There was an expansion of the EF doctrine in this case.
- Sea Containers (Part 2.)
“Cannot expect” owner of EF “to provide non-discriminatory access and to resolve its conflicts of interest unless it separates its management of the EF from its use of it”
- Ancillary Services
Flughafen Frankfurt [1998]
Commission held that undertaking which owned airport could not uset he property to restrict competitors from offering ancillary services e.g baggage loading or cabin cleaning
- Leading Case
Oscar Bronner GmbH & Co v Mediaprint [1999]
Bronner was publisher of newspaper in Autria with 3.6% market share. Mediaprint had 46.8%
- Leading Case (Part 2.)
[1999] Bronner argued could not develop home delivery service due to low market share, but needed service to survive. Claimed that Mediaprint operating this service was an EF, and wanted access.
Advocate General said intervention could only happen if there was a “genuine stranglehold” on the market. Court followed, no “genuine obstacle” (legal, economic etc.) restricting Bronner.
- Bronner Test (Part 3.)
Scenario: Duplication of facility is impossible or extremely difficult due to legal, physical or economic constraints.
Test: 1. For Refusal of access to = Abuse: must be extremely difficult for undertaking demanding access to compete.
- Consider all circumstances including the extent to which the dominant undertaking must pass on investment or maintenance costs in prices.
- Dominant undertaking also has to factor amortisation and upkeep.
KEY ELEMENTS IN BRONNER (PART FINAL 4)
Access to facility must be indispensable
Must not be practical to replicate facility even for an undertaking of a similar size.
Its not enough that the facility makes it difficult to compete.
IMS HEALTH
(2004) refusal of access to IP rights
abusive if: indispensable
prevents emergence of new product or service
eliminates competition
no objective jsutification
significance: extended EF doctrine to IP rights and reaffirmed Bronner conditions
