Competition and essential facilities: What’s new?

Law & Economics Workshop organized by Concurrences in partnership with Hogan Lovells and Charles River Associates.


Pierre de Montalembert (Partner, Hogan Lovells)

Critical infrastructure theory is often used to facilitate free competition in the presence of former public monopolies. The concept refers to a set of facilities owned by a dominant undertaking which are not easily replicable and to which access is indispensable for third parties to carry out their activity. It has its origin in the 1912 Terminal Railroad decision of the US Supreme Court, which made its use conditional on four criteria: the indispensable nature of the use of the infrastructure, the impossibility or at least the difficulty of duplicating it, the functional control of the holder and, less clearly, the need to ensure the maintenance of competition. Its introduction in Europe is more recent. It appeared with the Sealink case (Commission decision of 1993) and was enshrined by the ECJ in 1998 in its Brönner ruling. This ruling held that a refusal to contract is abusive when it relates to an indispensable good or service that cannot be reproduced by reasonable means and is liable to eliminate competition without objective justification. There are, however, transatlantic differences: under the influence of the Chicago School in particular, a fear has developed in the United States of giving pride of place to undeserving competitors who refuse to make investments, whereas the theory has met with great success in Europe, where the dominant concern was rather that of maintaining monopoly rents.

Photos © Léo-Paul Ridet.

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