Sector-specific essential facilities doctrine : a tool for remedying distortions of innovation competition for future markets

Abstract

In high-value-added industries the anticompetitive effect of refusals to deal may not pertain to existing downstream markets but to the process of innovation competition for future markets. This reveals the limitation of the current exceptional circumstances test tailored by EU judicature under what could be called a European essential facilities doctrine. Moreover, the strictness of the current legal test has resulted in its circumvention on certain occasions through the imposition of ad hoc facility sharing obligations on dominant undertakings. Against this background, the article proposes a sector-specific approach to the assessment of input foreclosures that are capable of restricting market-creating innovations. It is based on a two-stage legal test. First, the latter nuances antitrust liability according to the way in which the essential resource holder has attained that status. Second, the presence of key conditions shaping the innovation process in the respective industry is investigated. The aim is to mitigate excessive risks for innovation incentives associated with antitrust intervention in the context of competition for the market and to increase legal certainty. It is argued that an innovation-centric essential facilities doctrine can function only as sector-specific.