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32 St. Louis U. L.J. 433 (1987-1988)
The Law and Economics of the Essential Facility Doctrine

handle is hein.journals/stlulj32 and id is 443 raw text is: THE LAW AND ECONOMICS OF THE ESSENTIAL FACILITY DOCTRINE GREGORY J. WERDEN* I. INTRODUCTION The essential facility doctrine provides a generally recognized ba- sis for imposing antitrust liability for unilateral refusals to deal. Under the essential facility doctrine, a monopolist that denies a competitor access to an input considered an essential facility violates section 2 of the Sherman Act.' The purpose of this Article is to examine the law relating to the essential facility doctrine and to unilateral refusals to deal. Section II discusses the relevant case law regarding refusals to deal. First, con- certed refusals to deal are touched on, primarily because the law on unilateral refusals has evolved from the law on concerted refusals to deal. Next, cases dealing with unilateral refusals to deal are discussed, with emphasis placed on the origin and development of the essential facility doctrine. Finally, several related antitrust law doctrines are briefly reviewed. Section III discusses the nature and scope of the es- sential facility doctrine in greater detail, and explores the relationship between the essential facility doctrine and other legal doctrines that have evolved under the Sherman Act. Section IV reviews the economic theory relevant to the legal issues. The economic considerations are then applied to resolve several questions relating to the essential facility doctrine, and to develop proposals for alternative legal rules regarding unilateral refusals to deal. Finally, Section V provides a summary of the policy considerations germane to this body of antitrust law. * Economist, Antitrust Division, U.S. Department of Justice. The views expressed herein are not necessarily those of the U.S. Department of Justice. University of Cin- cinnati, B.A. 1973, University of Cincinnati, M.A. 1974, University of Wisconsin, M.A. 1976, University of Wisconsin, Ph.D. 1977. 1. This section provides: Every person who shall monopolize, or attempt to monopolize, or com- bine 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, and, on conviction thereof, shall be pun- ished by fine not exceeding one million dollars if a corporation, or, if any other person, one hundred thousand dollars, or by imprisonment not exceed- ing three years, or by both said punishments, in the discretion of the court. 15 U.S.C. § 2 (1982).

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